Term Deposit vs ETF Calculator
Compare a term deposit with a share ETF over time, after tax.
The Term Deposit vs ETF Calculator compares two places to park cash - TD interest taxed yearly vs ETF compounding with CGT on sale.
Who is it for? Anyone with savings deciding between safety and growth.
Assumptions: Ignores franking credits (understating ETFs) and volatility.
TD interest is taxed at your marginal rate every year. ETF growth compounds tax-deferred, then on sale gets the 50% CGT discount. ETFs usually win over 10+ years.
Rates checked September 2026 against the ATO.
Why tax timing matters
Term deposit interest is taxed every year at your marginal rate, so only the after-tax interest compounds. Most of an ETF's return comes from growth that isn't taxed until you sell, and if you've held for over 12 months only half the gain is taxed. Over many years that difference adds up.
From 1 July 2027 the 50% discount is being replaced by inflation indexing and a minimum 30% tax on real gains (gains built up before then keep the discount). See the CGT calculator for more.
Risk is the real difference
A term deposit's return is fixed and, up to $250,000 per person per bank, guaranteed by the government. An ETF can fall 20% to 40% in a bad year and take years to recover. Money you need within a few years usually belongs in a term deposit or high-interest savings, whatever this comparison shows.
This calculator also leaves out franking credits on Australian share ETFs, which make ETFs look a bit worse than they are.
Frequently asked questions
Over 5 years or more, a diversified ETF has historically returned more after tax, but with ups and downs. For money you need soon or can't risk, a term deposit is safer.
As income, at your marginal rate, in the year it's paid or credited to you.
Yes, in the year you get them, even if you reinvest them. Australian share ETFs often come with franking credits that reduce that tax.