Free Term Deposit Calculator for New Zealanders
Bank term deposits in NZ pay a fixed rate over 30 days to 5 years. Interest is taxable at your Resident Withholding Tax (RWT) rate. The calculator shows maturity value, gross and after-tax interest, and the effect of choosing the wrong RWT rate.
Your deposit
Based on a $25,000 deposit at 5.00% for 12 months, RWT 33%.
About our Term Deposit Calculator
$50,000 in a 1-year term depositTerm depositFixed-rate savings locked away for a set period (30 days to 5 years) in exchange for a higher rate.View in glossary → at 5.10% pays $2,550 of gross interest. After RWTRWTResident Withholding Tax; tax taken at source from NZ-resident interest and dividends.View in glossary → at 30%, the net is $1,785. The bank pays the lump back plus the net at maturity, no other moving parts.
The maths is simple-interest, not compound. Term deposits pay the contracted rate over the contracted term. Compounding only enters the picture when you roll the matured deposit (principal plus net interest) into a new term, at whatever rate the bank is offering then.
The calculator returns gross interest, RWT deducted, net interest, and the maturity value (principal plus net interest). Pick the right RWT rate from the toggle: 17.5% for someone whose only income is NZ Super or wages under $53,500, 30% if combined income runs from $53,501 to $78,100, 33% above that.
Move the term slider between 1 and 60 months to see the effect. Longer terms typically pay 0.25-0.5% more per year than 6-month terms, in exchange for less liquidity. Move the rate slider to bracket your bank’s offer against the others quoted in the market.
How to use it
Enter the deposit amount, term length in months, the contract rate, and your RWT rate. The default RWT of 33% is the bank’s default for anyone who has not elected; a lower rate often applies for retirees and lower-earning households.
The result panel returns the gross interest earned, the RWT taken at source, the net interest received, and the maturity value (deposit plus net interest).
For a sense-check on the contract rate, the Reserve Bank’s monthly retail-deposit data publishes the weighted-average rate banks are paying by term band. A bank offering meaningfully below that average is worth questioning; a meaningfully above-average rate is worth asking why.
Why use it
Term deposits are NZ’s most popular fixed-income vehicle because they are simple, low-risk, and tax-handled at source. The calculator answers the only two questions that matter: what does the deposit pay net of tax, and what does the bank pay back at maturity.
The RWT rate is the most-overlooked input. A retiree letting the bank default to 33% on a $50,000 deposit at 5.10% pays $84 a year more in RWT than a 30%-rate election would extract, on income that ultimately gets squared up at year-end anyway. Notifying the right rate up front avoids the cash-flow round trip.
For larger sums, the Depositor Compensation Scheme’s $100,000-per-bank protection limit is also worth running through the calculator. Splitting $250,000 across three banks at slightly different rates loses very little in headline return but keeps every dollar inside the protection cap.
The maths behind it
Net interest = Deposit × Rate × (Term ÷ 12) × (1 − RWT rate) Term deposits at NZ banks pay simple interest at the contracted rate over the contracted term. The calculator multiplies your deposit by the rate, scales by term length in months, then subtracts RWT at your chosen rate. Compounding only applies if you roll the deposit at maturity (and even then, only annually). For multi-year terms, banks pay interest annually rather than at maturity, so the calculator’s simple-interest figure is correct for the typical deposit structure.
Worked example
Vivian, retired schoolteacher in Timaru, with $80,000 in a 12-month term deposit at 5.10%.
Vivian rolled her late husband’s estate into a one-year term deposit at 5.10%. RWT applies at her marginal rate of 30%, since her combined income (NZ Super plus the new interest) sits in the 30% bracket.
Gross interest at 5.10% on $80,000 over 12 months is $4,080. RWT at 30% takes $1,224 of that.
Net interest after tax: $2,856. Vivian’s deposit matures at $82,856 (the $80,000 principal plus $2,856 net interest), assuming she does not roll it.
Spreading the $80,000 across four staggered $20,000 deposits at 6, 12, 18, and 24 months (a laddered structure) would keep $20,000 reaching maturity every six months, giving her flexible access without losing the rate premium of longer-term deposits.
Things to keep in mind
- <span class="term" tabindex="0" aria-describedby="term-tip-rwt">RWT<span class="term__tip" role="tooltip" id="term-tip-rwt"><strong>RWT</strong><span class="term__tip-def">Resident Withholding Tax; tax taken at source from NZ-resident interest and dividends.</span><a href="/glossary/#rwt" class="term__tip-link">View in glossary →</a></span></span> rate selection. Your RWT rate has to be notified to the bank, otherwise it defaults to 33%. The right rate is the marginal rate of your highest-bracket income, which for retirees is usually 17.5% or 30%. The wrong rate either underpays (square-up at year-end) or overpays (refund at year-end).
- Early withdrawal penalty. Most NZ banks let you break a term deposit early at a reduced rate (often 50-75% of the contract rate) on the period actually held. Some banks require 31 days notice for any withdrawal, even if the term has matured. Check the specific bank’s terms before locking funds away.
- Deposit insurance is partial. NZ’s Depositor Compensation Scheme protects up to $100,000 per depositor per licensed bank, set to take effect from 1 July 2025 onwards. Above that figure, deposits are at the bank’s credit risk. For deposits over $100,000, consider splitting across two or more banks.
- Inflation can outpace the rate. A 5% term-deposit rate at 3% NZ inflation is a 2% real return. After RWT at 30%, the real return turns negative for any inflation rate above the post-tax interest rate. The calculator works in nominal dollars; subtract your inflation assumption for real-purchasing-power figures.
- Joint accounts split for RWT. A joint term deposit splits the interest 50/50 for tax purposes by default, allowing each holder to apply their own RWT rate. This can lower the effective tax if one joint holder is in a lower bracket.
NZ-specific notes
FAQs
How does RWT actually come off?
The bank deducts RWT at your nominated rate when interest is paid (annually, or at maturity for terms under 12 months). The deducted RWT shows on your bank statement and on the IRD records that pre-fill at year-end. If your nominated rate matches your true marginal rate, no further squaring-up is needed. If not, the difference settles via your IR3 or auto-assessment.
What rate should I pick?
Pick the marginal rate of your highest-bracket personal income. For a retiree on NZ Super alone, that is usually 17.5% (since NZ Super sits in the second bracket). For a retiree with private pension income on top, often 30%. For a working person whose total income is in the 33% bracket, 33%. The wrong rate is fine in the short term but creates square-up adjustments at year-end.
Can I break a term deposit early?
Yes, but at a reduced rate. NZ banks typically apply 50-75% of the contract rate to the period actually held when a term deposit is broken before maturity, and may require 31 days notice. Some short-term deposits (under 32 days) are non-breakable. The specific terms are in the deposit confirmation.
Is interest paid monthly or at maturity?
For terms under 12 months, interest is typically paid at maturity. For terms over 12 months, NZ banks usually offer a choice of interest paid monthly, quarterly, semi-annually, or annually, with a slightly lower rate on the more frequent payment options. The calculator assumes interest at maturity for simplicity.
How safe are term deposits?
NZ retail bank term deposits are protected up to $100,000 per depositor per licensed bank under the Depositor Compensation Scheme (effective 1 July 2025). Above that figure, the deposit ranks alongside other bank creditors in a hypothetical bank failure. Splitting across two or three banks keeps balances under the protection cap.
What is a term-deposit ladder?
Spreading a single sum across multiple deposits with staggered maturities (e.g., $20k each at 6, 12, 18, 24 months). One deposit reaches maturity every six months, giving regular access without sacrificing the higher rates that longer terms typically pay. The ladder also smooths out rate-cycle exposure.
Can I roll the deposit at maturity?
Yes. Most banks default to automatic rollover at the prevailing rate for the same term, unless you instruct otherwise within a few days of maturity. The rollover rate is whatever the bank is offering at that moment, which may be higher or lower than the original rate.
References & sources
- Inland Revenue, "Resident Withholding Tax (RWT)". ird.govt.nz
- Reserve Bank of New Zealand, "Bank lending and deposit interest-rate statistics". rbnz.govt.nz
- Reserve Bank of New Zealand, "Depositor Compensation Scheme". rbnz.govt.nz
- Financial Markets Authority, "Consumer information on financial products". fma.govt.nz