Forecast your savings · 2026-27
Savings interest calculator
Starting with $10,000 and depositing $500 a month at 4.5% (an example rate), you would have $83,761 in 10 years. After tax and inflation, that is worth $65,434 in today's dollars. Use your own account's rate for a real forecast.
After tax and inflation
$83,761.23
Final balance in today's dollars: $65,434.14
| Total deposited | $60,000.00 |
|---|---|
| Interest earned | $20,237.10 |
| Tax on interest (at year end) | -$6,475.87 |
| Final balance | $83,761.23 |
Year-by-year breakdown
| Year | Deposits | Interest | Tax | Balance | Real value |
|---|---|---|---|---|---|
| 1 | $6,000.00 | $584.71 | $187.11 | $16,397.60 | $15,997.66 |
| 2 | $6,000.00 | $878.61 | $281.16 | $22,995.06 | $21,887.03 |
| 3 | $6,000.00 | $1,181.70 | $378.14 | $29,798.61 | $27,670.98 |
| 4 | $6,000.00 | $1,494.25 | $478.16 | $36,814.71 | $33,352.31 |
| 5 | $6,000.00 | $1,816.57 | $581.30 | $44,049.97 | $38,933.76 |
| 6 | $6,000.00 | $2,148.96 | $687.67 | $51,511.27 | $44,418.00 |
| 7 | $6,000.00 | $2,491.73 | $797.35 | $59,205.64 | $49,807.65 |
| 8 | $6,000.00 | $2,845.21 | $910.47 | $67,140.38 | $55,105.24 |
| 9 | $6,000.00 | $3,209.73 | $1,027.11 | $75,323.00 | $60,313.26 |
| 10 | $6,000.00 | $3,585.64 | $1,147.40 | $83,761.23 | $65,434.14 |
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How savings interest works
Your bank pays interest monthly (or daily, depending on the account) at an annual rate. Most calculators show interest as if it is paid once a year, but it actually compounds: each month, interest is calculated on your balance (including the previous month's interest), added to your account, and then your monthly deposit is added.
At the end of each financial year (30 June), the interest you earned is taxable income and added to your tax return. It is taxed at your marginal rate, which is the rate of tax on your next dollar of income. If you earned over $45,000 last year, for example, your marginal rate is 30% plus the 2% Medicare levy = 32%. The calculator deducts tax from your balance at the end of each year.
Real return is your balance adjusted for inflation. If you save 4.5% a year but inflation is 2.5%, your purchasing power grows at about 2%.
Common questions
How is compound interest calculated?
Interest compounds monthly at your account's annual rate ÷ 12. Each month, interest is added to your balance first, then your monthly deposit is added. Tax on the year's interest is deducted at the end of the year, reducing your balance.
Is interest on savings taxed?
Yes. Interest on savings is taxable income at your marginal rate, and it is included in your tax return. The calculator deducts it at the end of each year. Money in a mortgage offset account earns no interest at all; it reduces the interest on your loan instead, so it is not taxed.
What is the real return, after inflation?
The real balance adjusts for inflation using the formula: real balance = balance ÷ (1 + inflation rate)^year. The "real" figure tells you what your money is actually worth in today's dollars. A 4.5% interest rate with 2.5% inflation gives a real return of about 2%.
How does the RBA cash rate affect savings rates?
Banks usually move savings rates when the RBA moves the cash rate, but not always by the same amount or at the same time. You can check the RBA's rate forecast and decision history to see what has happened and what is expected.
More ways to check your pay
How this is worked out
- Interest compounds monthly at annual rate ÷ 12. Each month, interest is added first, then the monthly deposit is added.
- Tax is deducted at the end of each year (not withheld monthly) at your marginal rate as a percentage of that year's interest.
- Marginal tax rates are from the 2026-27 resident brackets plus the 2% Medicare levy. Actual tax on interest depends on your full income and offsets; this is a guide.
- Real balance = balance ÷ (1 + inflation rate)^year, to show purchasing power in today's dollars.
- No bank fees, account-switcher rates or account-specific conditions are modelled.
Estimate only, not financial or tax advice. See our methodology.