Term Deposit Calculator UK

What Is a Term Deposit?

A term deposit (also known as a fixed deposit or bond) is a savings account where you lock your money away for a fixed period at a fixed interest rate. This term deposit calculator UK helps you calculate your returns.

How to Use the Term Deposit Calculator

Enter your deposit amount, annual interest rate, term in months and interest payment frequency. Click Calculate Term Deposit to see your maturity amount and interest earned.

How Term Deposit Returns Are Calculated

Term Deposit Example

Understanding Term Deposits

• Fixed Rate: Rate is fixed for the entire term
• Fixed Term: Money is locked in for the term
• Guaranteed Returns: Returns are guaranteed
• Early Withdrawal: Usually has penalties
• FSCS Protected: Up to £85,000 per institution

Current UK Term Deposit Rates (2025/26)

• 1 Year Fixed: 4.0-5.0%
• 2 Year Fixed: 4.5-5.5%
• 3 Year Fixed: 4.0-5.0%
• 5 Year Fixed: 3.5-4.5%

Interest Payment Options

• Paid at Maturity: Interest paid at the end of the term
• Paid Monthly: Regular monthly income
• Paid Quarterly: Interest paid every 3 months
• Paid Annually: Interest paid once per year

Term Deposit vs Savings Account

• Term Deposit: Higher rates, fixed term, no access
• Savings Account: Lower rates, flexible access, variable rates

Common Term Deposit Mistakes

• Not comparing rates — shop around for best rates
• Locking in for too long — rates may rise
• Not understanding penalties — early withdrawal fees
• Ignoring tax — interest is taxable
• Not using ISA — tax-free wrapper available

Important Assumptions and Limitations

• Assumes fixed interest rate for the entire term
• Does not account for tax or inflation
• Early withdrawal penalties not included
• Results are estimates, not guaranteed

Frequently Asked Questions