Fixed Deposit Calculator
Calculate fixed deposit returns after interest tax and exemptions.
Last reviewed: Tax year: 2026/2027Source: SARS — Interest exemption
What a fixed deposit is (and isn't)
A fixed deposit (FD) is a cash deposit you commit to the bank for a fixed term — typically 3, 6, 12, 24, 36, or 60 months — in exchange for a higher interest rate than a savings account. The bank can lend your money out for the full term, so they reward you with predictability.
The FD is capital-guaranteed (up to R100,000 under SA’s deposit insurance scheme, per bank, from Jan 2025). The interest rate is fixed when you open the account — rate moves by SARB after you deposit don’t affect you. At the end of the term, you get your capital back plus the accrued interest.
FDs are not investments in a market sense — there’s no equity exposure, no growth potential beyond the contracted rate, and usually a steep early- withdrawal penalty (loss of interest, sometimes capital charges).
Nominal vs effective rate — the number the bank advertises isn't what you earn
Banks quote FD rates two ways and the difference matters:
- Nominal APR. The headline annual rate. E.g. “9% per annum.”
- Effective annual rate. What you actually earn in a year, accounting for compounding frequency. At 9% nominal with monthly compounding, effective is ~9.38%.
For a 12-month FD paying interest only at maturity, nominal = effective (no intra-year compounding). For multi-year FDs where interest compounds quarterly or monthly within the term, effective rate is what you actually receive.
| Compounding | Effective rate |
|---|---|
| Annual (once/year) | 9.000% |
| Semi-annual | 9.202% |
| Quarterly | 9.308% |
| Monthly | 9.381% |
| Daily | 9.416% |
Typical SA FD rates in 2026
FD rates track the SARB repo rate (11.75% prime is the reference point). Expect:
| Term | Nominal rate range |
|---|---|
| 3 months | 7.5% – 8.5% |
| 6 months | 8.5% – 9.5% |
| 12 months | 9.0% – 10.0% |
| 24 months | 9.5% – 10.5% |
| 36 months | 10.0% – 11.0% |
| 60 months | 10.5% – 11.5% |
The interest exemption — first R23,800 is tax-free
Interest income is normally taxed at your marginal rate. But SARS grants an annual exemption on the first chunk of interest earned in a tax year:
| Age | Annual interest exemption |
|---|---|
| Under 65 | R23,800 |
| 65 and over | R34,500 |
For a 31% marginal-rate saver under 65, the R23,800 exemption is worth R7,378 in saved tax per year. At 9% interest, you need roughly R264,444 in deposits to fully use the exemption.
Above the exemption, interest is taxed at your marginal rate — fully. This is why TFSAs (no tax ever) beat FDs for long-term tax-free growth on large balances.
Worked examples
R300,000 FD for 12 months at 9.5% nominal
Under 65, 31% marginal tax rate, no other interest income this year. Interest just exceeds the exemption — shows both pieces of the mechanic.
- Principal
- R300,000
- Nominal rate
- 9.5% (interest on maturity)
- Interest earned
- R28,500
- Less interest exemption
- −R23,800
- Taxable interest
- R4,700
- Tax at 31%
- R1,457
R500,000 FD for 24 months at 10% nominal (compounded monthly)
Under 65, 36% marginal rate. R50,000 other interest from money-market fund (uses up exemption).
- Principal
- R500,000
- Effective rate (10% / 12 monthly compound)
- ≈ 10.47%
- Interest year 1
- ≈ R52,350
- Interest year 2 (on compounded balance)
- ≈ R57,830
- Total interest over 24 months
- ≈ R110,180
- Exemption already used
- R0 remaining
- Tax at 36%
- ≈ R39,665
Retiree with R1,000,000 spread across 3 FDs at 10%
Age 68, 26% marginal rate, no other interest. Eligible for over-65 exemption.
- Total capital
- R1,000,000
- Total interest year 1
- ≈ R100,000
- Less over-65 exemption
- −R34,500
- Taxable interest
- R65,500
- Tax at 26%
- ≈ R17,030
FD vs TFSA for long-term savings
The FD feels safer (capital-guaranteed, fixed rate) but for anyone with a 5+ year horizon, the after-tax return lags a TFSA dramatically on returns above the R23,800 exemption.
- FD at 9% with 31% marginal tax on interest above the exemption = net ~6.2% above the exemption line.
- TFSA at 9% interest (cash TFSA) = 9% forever, no tax cap on growth.
Where FDs still make sense: capital that MUST be guaranteed (school fees due in 18 months, a deposit you’ve saved), amounts below the exemption, and emergency-fund tiers where you want a known lock-up period.
How this calculator works
Enter principal, interest rate (nominal), term, and compounding frequency. The calculator returns maturity value, total interest, effective annual rate, and the after-tax equivalent if you provide your marginal rate and age (applies the R23,800 / R34,500 interest exemption automatically).
Sources
Frequently Asked Questions
Individuals under 65 can earn up to R23,800 in interest tax-free per year. Those 65 and older have a higher exemption of R34,500. This applies to all interest-bearing investments.
Interest above your exemption threshold is added to your taxable income and taxed at your marginal rate (18–45%). The calculator shows tax payable and effective return after tax.
The exemption is total across all interest-bearing investments you hold. If you have multiple bank accounts, bonds, or investment accounts earning interest, you can use up to R23,800 (or R34,500 if over 65) across all of them.
The interest exemption is claimed on your annual tax return (ITR). Include all interest earned and your exemption amount. Your bank may ask for a certificate of exemption if interest earned exceeds the threshold.