Deposit Calculator

The deposit calculator estimates the return on a bank deposit: enter the amount, term in months and annual rate, choose how often interest is capitalized – the calculator shows the final balance, interest earned and the effective annual rate, plus a month-by-month schedule. It works for any bank: the interest formulas are the same everywhere.

What is a bank deposit

A deposit is a way to lend money to a bank at interest: you give the bank your money, and it pays you income. The bank sets the rate and the term, and pays interest monthly or at the end of the term. A deposit is the simplest and safest way to save: your money is insured – in the US, the FDIC covers up to $250,000 per depositor per bank.

How to use the calculator

Enter the deposit amount and the term in months, then the annual rate from your bank’s offer. Choose capitalization: without it, interest is paid out and the deposit does not grow; with monthly or daily capitalization, interest is added to the balance and starts earning interest itself. If you plan to add or withdraw money, turn on “Deposits and withdrawals” and add each operation with its month and amount – it is applied at the start of that month.

Interest capitalization

Without capitalization, the bank transfers the interest to a separate account every month and the deposit amount stays the same – these are “simple interest”. With capitalization, the interest stays on the deposit: the balance grows with every payout, and the next interest is calculated on the larger amount – these are “compound interest”. Compare both options in the calculator: on longer terms the difference in earnings is noticeable.

Effective interest rate

The effective rate shows the real annual return of a deposit including capitalization: the interest earned relative to the initial amount, converted to a yearly figure. With monthly capitalization, the effective rate is always higher than the nominal one – a deposit advertised at 4% earns more than 4% over a year. The calculator computes it with the universal formula: interest for the whole term × 365 / (amount × term in days) × 100.

Tax on deposit interest

Interest income may be taxable. In the US, bank deposit interest is taxed as ordinary income at the federal and state level; banks report it to the IRS and you receive a 1099-INT form. The calculator shows earnings before taxes – for large amounts, keep the possible tax in mind.

This calculation is preliminary. Check the exact terms with your bank.

Частые вопросы

Which is better: a deposit with or without capitalization?
With capitalization: interest is added to the deposit and starts earning interest itself. The difference is small on short terms, but from one year onward it becomes noticeable – compare both options in the calculator.
What is the effective rate on a deposit?
It is the real annual return including capitalization: how much interest the deposit earns relative to the initial amount over a year. With monthly capitalization it is always higher than the nominal rate advertised by the bank.
Is deposit interest taxed?
It depends on your country. In the US, deposit interest is taxed as ordinary income and the bank reports it on form 1099-INT. In some countries, small amounts of interest are exempt – check your local rules.
When does the bank pay interest on a deposit?
It depends on the terms: monthly to a separate account (no capitalization), monthly onto the deposit itself (with capitalization), or at the end of the term. Check the payment schedule in your agreement – the return depends on it.
Can I add money to a deposit?
Many deposits allow top-ups. In the calculator, switch on “Deposits and withdrawals” and add each deposit with its month and amount – the income grows, and the schedule shows how the balance builds up.
What determines the deposit rate?
The central bank’s key rate, the term, the amount and the bank’s program. In the US, deposit rates broadly follow the federal funds rate set by the Federal Reserve. Rates are usually higher for longer terms, larger amounts and online banks without branches – compare offers from several banks before opening one.