Compound interest calculator
See how savings grow with monthly deposits. Resident withholding tax is taken off each interest payment before it is added to the balance.
| Year | Paid in | Balance |
|---|---|---|
| 1 | $13,000 | $13,330 |
| 2 | $16,000 | $16,753 |
| 3 | $19,000 | $20,275 |
| 4 | $22,000 | $23,895 |
| 5 | $25,000 | $27,619 |
| 6 | $28,000 | $31,448 |
| 7 | $31,000 | $35,386 |
| 8 | $34,000 | $39,436 |
| 9 | $37,000 | $43,600 |
| 10 | $40,000 | $47,882 |
How it works
Each month your deposit is added and one month of interest (the yearly rate ÷ 12) is paid on the whole balance. Your bank deducts resident withholding tax (RWT) from the interest before it is added, so only the after-tax interest compounds.
RWT rates on interest
| Your taxable income | RWT rate |
|---|---|
| $0 to $15,600 | 10.5% |
| $15,601 to $53,500 | 17.5% |
| $53,501 to $78,100 | 30% |
| $78,101 to $180,000 | 33% |
| Over $180,000 | 39% |
| No IRD number given | 45% |
Pick the rate that matches your income including the interest. If your bank uses a rate that is too low, you pay the difference after the year ends; too high and you get a refund.
Examples after 10 years
| Start | Monthly | Rate | Before tax | After 30% RWT |
|---|---|---|---|---|
| $5,000 | $100 | 4% | $22,228 | $20,476 |
| $10,000 | $250 | 4% | $51,843 | $47,882 |
| $20,000 | $0 | 5% | $32,940 | $28,367 |
| $0 | $500 | 3.5% | $71,925 | $68,049 |
Term deposits often pay interest only at maturity, so compare them on the same basis. PIE funds tax returns at your prescribed investor rate (PIR), which is capped below the top personal rates, so they can beat a bank account for higher earners.
Paying off debt instead
Compounding works against you on debt. A credit card at 20% or more costs far more than any savings account pays, so clearing it usually beats saving. Extra mortgage repayments save interest at your mortgage rate, tax-free, which is worth comparing with after-tax savings returns.
Common questions
What is $10,000 at 5% for 10 years?
About $16,470 before tax with monthly compounding, or $14,183 after 30% RWT.
What RWT rate should I use?
The rate for your total taxable income, including the interest. If you have not given your bank your IRD number, it must deduct 45%.
Is interest in a PIE fund taxed differently?
Yes. PIE income is taxed at your prescribed investor rate (PIR), set by your income over the last two years and capped below the top personal rates, not at your marginal rate.
Does the calculator include inflation?
No. It shows the dollar balance. Compare your after-tax rate with inflation to see whether your savings are growing in real terms.
Sources
Checked 28 September 2026. OneCalcs is independent and not affiliated with Inland Revenue, Employment New Zealand, ACC or any government agency.