7 min read
2026-01-15
A deposit is placing money in a bank at a fixed interest rate. The bank uses your money and pays interest for it.
Interest is accrued only on the initial amount. Formula: Income = Amount x Rate x Term.
Interest is added to the deposit balance and in the next period, interest is accrued on the increased amount.
| Compounding | Accruals per Year | Effective Rate at 12% |
|---|---|---|
| Annual | 1 | 12.00% |
| Quarterly | 4 | 12.55% |
| Monthly | 12 | 12.68% |
| Daily | 365 | 12.75% |
**Deposit amount** — initial sum placed
**Interest rate** — the bank's annual rate
**Term** — deposit duration
**Compounding** — frequency of interest accrual
**Top-ups** — regular additional contributions
Interest income on deposits above a certain threshold is subject to income tax. The calculator accounts for this automatically.
Calculate your deposit income with the Deposit Calculator.
See also: Investment Calculator, Inflation Calculator