Deposit terms
Tax starts at 0 because the rate differs by country. Enter yours to see the net amount.
Interest only ever applies to the principal
Simple interest is principal × annual rate × term. Interest already paid never earns interest of its own, so the amount you earn each year stays the same. Most bank term deposits work this way, or pay everything at maturity in one lump — unless the product literally says "monthly compounding," treat it as simple interest.
Compound interest only pulls ahead with time
Over one or two years, simple and compound interest barely differ. Stretch the term to ten or twenty years and the gap becomes obvious. For money you are only parking briefly, comparing the rate and the after-tax payout matters more than which method a product uses.
Compare the after-tax number
Interest income is taxed differently in every country, so the tax rate here starts at 0 — enter your own rate to see what you actually keep. A 4% rate can look very different once tax is applied, and breaking a term deposit early usually switches you to a much lower early-withdrawal rate instead of the rate you signed up for.
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Frequently asked questions
QIs this the same simple interest my bank uses?
Most ordinary term deposits use exactly this method — principal × rate × time, paid at intervals or at maturity, with nothing capitalised. If the terms mention monthly or daily compounding, use a compound interest calculator instead.
QWhy does the compound-interest difference look tiny here?
Because the gap between simple and compound interest grows with the length of the term. Over a year or two it is small; run the same numbers over ten or twenty years and it becomes significant.