function calculateTermDeposit() {
// 1. Get input values by specific IDs
var amountInput = document.getElementById('depositAmount');
var rateInput = document.getElementById('interestRate');
var termInput = document.getElementById('termLength');
var rwtInput = document.getElementById('rwtRate');
var amount = parseFloat(amountInput.value);
var rate = parseFloat(rateInput.value);
var months = parseFloat(termInput.value);
var rwt = parseFloat(rwtInput.value);
// 2. Validate inputs
if (isNaN(amount) || amount <= 0) {
alert("Please enter a valid investment amount.");
return;
}
if (isNaN(rate) || rate < 0) {
alert("Please enter a valid annual interest rate.");
return;
}
if (isNaN(months) || months 1 year, some banks compound, but standard quoted rates
// usually calculate simple interest paid at maturity or periodically.
// This calculator uses the standard simple interest formula which is
// universally used for estimating term deposit returns in NZ for standard comparisons.
var grossInterest = amount * (rate / 100) * (months / 12);
// Calculate Resident Withholding Tax (RWT)
var taxDeduction = grossInterest * (rwt / 100);
// Calculate Net Interest
var netInterest = grossInterest – taxDeduction;
// Calculate Total Value at Maturity
var totalValue = amount + netInterest;
// 4. Update the DOM with results
document.getElementById('displayGross').innerHTML = '$' + grossInterest.toLocaleString('en-NZ', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('displayTax').innerHTML = '-$' + taxDeduction.toLocaleString('en-NZ', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('displayNet').innerHTML = '$' + netInterest.toLocaleString('en-NZ', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('displayTotal').innerHTML = '$' + totalValue.toLocaleString('en-NZ', {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show result container
document.getElementById('resultContainer').style.display = 'block';
}
Understanding Term Deposit Rates in New Zealand
In the current New Zealand economic climate, securing a reliable return on your savings is crucial. A Term Deposit offers a low-risk investment option where you lock away a sum of money for a fixed period at a fixed interest rate. This calculator helps you estimate your returns based on current NZ market rates and tax obligations.
How the NZ Term Deposit Calculator Works
This tool allows you to forecast the profitability of locking your funds away. By inputting your principal Investment Amount, the Annual Interest Rate offered by your bank, and the Investment Term in months, the calculator determines your gross return.
Critically, it also adjusts for Resident Withholding Tax (RWT), which is the tax deducted at source from interest earned by New Zealand tax residents.
Pro Tip: Interest rates in New Zealand are often advertised as "per annum" (p.a.). Even if you invest for only 6 months, the rate shown is usually the annual equivalent. Our calculator automatically adjusts the math to reflect the actual term length (e.g., calculating for 6/12ths of a year).
Selecting the Correct RWT Rate
To get an accurate result, you must select the correct RWT rate corresponding to your taxable income. Under-deducting RWT can lead to a tax bill at the end of the financial year. As of current IRD regulations, the rates are generally:
10.5%: If your taxable income is $14,000 or less.
17.5%: If your taxable income is between $14,001 and $48,000.
30.0%: If your taxable income is between $48,001 and $70,000.
33.0%: If your taxable income is between $70,001 and $180,000.
39.0%: If your taxable income is over $180,000.
Factors Influencing Term Deposit Rates
Several factors dictate the rates offered by major NZ banks (such as ANZ, BNZ, Westpac, ASB, and Kiwibank):
The Official Cash Rate (OCR): Set by the Reserve Bank of New Zealand, this influences the cost of borrowing and the return on savings.
Investment Term: Typically, longer terms (1 to 5 years) offer higher rates than shorter terms (30 to 90 days), though this can invert during specific economic conditions.
Inflation: If the inflation rate is higher than your term deposit rate (after tax), the real purchasing power of your money may decrease.
Compounding vs. Maturity
Most standard term deposits in New Zealand calculate interest using simple interest if the term is less than 12 months, paying the full amount at maturity. For terms longer than 12 months, banks may offer the option to have interest compounded (added to your principal) or paid out into a separate account periodically. This calculator assumes interest is calculated on the principal balance for the specific duration provided.