How is savings account interest calculated?

Most NZ savings accounts calculate interest daily on your balance and pay it monthly. The annual rate is divided across the days, so a higher balance and a higher rate both earn more. Bonus-rate accounts pay extra if you meet conditions like no withdrawals.

Is savings interest taxed?

Yes. Resident Withholding Tax (RWT) is deducted at your chosen rate (matching your income tax rate). This calculator shows interest before and after RWT so you see what actually lands in your account.

How do regular deposits help?

Adding money regularly grows the balance that earns interest, so your interest compounds over time. Even small, consistent deposits make a meaningful difference over a year or more.

Savings Account Interest Calculator

This calculator works out how much interest you will actually earn on an on-call savings account in New Zealand once Resident Withholding Tax (RWT) is taken out, so you see what really lands in your account rather than the headline rate the bank advertises. You enter your starting balance, the interest rate you are offered, how much you add as a regular monthly deposit, and your RWT rate, matching your income tax rate (10.5%, 17.5%, 30%, 33% or 39%). The calculator compounds your balance monthly over a year, adding each deposit, then totals the interest earned. It returns four figures: the interest earned after RWT, the headline result; the interest before tax; the RWT deducted; and your end balance after tax for the year. Because interest compounds and RWT is deducted along the way, the after-tax figure is the one worth comparing against inflation or another account's rate, not the advertised gross rate. Use it to compare accounts, see how much a small increase in your regular deposit adds over a year, or check whether a bonus-rate account with conditions like no withdrawals is worth chasing. Bonus rates, fees and any change in the interest rate during the year are not modelled, and results are an estimate based on the figures you enter, so treat them as indicative only rather than a bank statement.

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Starting balance

Interest rate p.a.

Monthly deposit

Your RWT rate

interest earned in a year, after RWT

Interest before tax$0

RWT deducted$0

End balance$0

Assumes interest compounds monthly with your monthly deposit added. Bonus-rate accounts may pay more if you meet conditions. RWT is deducted at your chosen rate. Estimate only.

How it works

The calculator compounds your balance monthly at the annual rate, adding your monthly deposit each month, over a year. It totals the interest earned, deducts RWT at your chosen rate, and shows the after-tax interest and the end balance. Because tax takes a slice, the after-tax figure is what actually grows your savings, and is the number to compare against inflation.

Worked example

$10,000 at 4% with $200 a month added earns about $452 of interest before tax over the year. At a 30% RWT rate, about $136 is deducted, leaving roughly $316 of after-tax interest and an end balance near $12,716.

Related calculators

Savings Calculator: savings growth.
Term Deposit Calculator: term deposits.
Compound Interest Calculator: compounding.
Savings Goal Calculator: reach a goal.

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