The rate field starts at 5.00% - the current average advertised 1-year term-deposit rate ($10k), September 2026 · SOURCE RBA F4. Advertised rates vary by bank, amount and term; change it to match your quote.
What this interest figure assumes
This models the full term held to maturity. It does not model an early withdrawal, which normally carries notice, a reduced rate and sometimes a fee. It also returns a pre-tax figure: the ATO states that “interest from a bank or other financial institution is part of your assessable income for the income year”, so the after-tax return depends on the holder’s marginal rate, and on a joint account each holder declares their own share.
A worked example. Take 50,000 dollars for twelve months at an assumed 4.50 per cent. Not a rate on offer, just a clean number. Paid at maturity, the interest is simple: 2,250 dollars. Reinvested monthly at the same nominal rate, each month’s interest joins the balance before the next is worked out, and the twelve-month total is about 2,297 dollars. Compounding is worth about 47 dollars.
Now the part the arithmetic cannot show. The ACCC found that where banks offer a choice of interest payment frequency, “customers are generally offered a better nominal rate for less frequent interest payments”. So the monthly option that compounds is often advertised at a lower rate than the at-maturity option that does not. The conclusion to draw is that payment frequency is not a free upgrade, and the comparison that holds is between the two quotes as they are actually offered, rather than the same rate modelled under two frequencies.
Longer read: What breaking a term deposit costs, and the rollover nobody chooses. A term deposit trades access for certainty, and the price of taking the access back is set by an interest-reduction clause rather than a fee. At the other end sits a rollover that around nine in ten deposits take by default.
Related: the RBA cash rate drives deposit pricing, and the term deposit rate tables show the current advertised averages by term. How the product works is set out in how term deposits work, and what an early break costs, along with the rollover most deposits take by default, in what breaking a term deposit costs.