Question 1

How is term deposit interest taxed?

Accepted Answer

Term deposit interest is added to your taxable income and taxed at your marginal rate. If you earn $85,000 salary plus $2,375 in term deposit interest, the interest is taxed at 30%. Your after-tax return is lower than the advertised rate.

Question 2

Is a term deposit better than a savings account?

Accepted Answer

It depends on current rates and whether you need access. Term deposits lock your money for a fixed period but may offer a slightly higher rate. High-interest savings accounts offer flexibility and sometimes match or beat term deposit rates. Compare the after-tax returns of both.

Get notified when we add new calculators