Simple Savings Calculator
Work out the simple-interest interest and maturity value of a deposit over a term.
Input Data
Results
At a glance:The Simple Savings Calculator uses the simple-interest (flat-rate) model to work out how much interest and maturity value a deposit earns over a set term. Unlike compound interest, simple interest accrues only on the original principal and does not roll earned interest back to earn more. Core formula: interest = principal × annual rate × years; maturity value = principal + interest. Suitable for time deposits and short-term notes quoted on a simple-interest basis. If the product compounds (most bank savings and regular-investment plans), the actual return is higher and you should switch to a compound calculator.
Formula
Interest = principal × annual rate × years.
Maturity value = principal + interest = principal × (1 + annual rate × years).
$$\text{Interest} = P \times r \times t$$$$\text{Total} = P + \text{Interest} = P \times (1 + r \times t)$$How to Use
- Enter the principal deposited.
- Fill in the annual rate and deposit term.
- Instantly get the interest earned and maturity value.
FAQ
What is the difference between simple and compound interest?
Simple interest accrues only on the original principal; earned interest does not earn more interest. Compound interest rolls each period's interest back into the principal. At the same rate and term, compound return is higher, and the gap widens with time.
Which products use simple interest?
Some short-term notes, certain time deposits and loans quoted on a simple-interest basis use it. Most bank savings, regular-investment plans and investment products compound. Confirm the product's interest method before use.
Is the interest taxable?
In Hong Kong, personal deposit interest is generally not subject to profits tax or salaries tax. But if it involves overseas assets or specific investments, the tax treatment may differ; seek professional advice if in doubt.
If compounding pays more, why do some products still use simple interest — how do I choose?
A good question. Since compound wins at the same rate and term, why do products still use simple interest? It comes down to the product's nature, ease of calculation and how the rate is quoted. First, some products suit simple interest by nature — it is most common in short-term, one-off, bullet-payment scenarios: some short-term notes, certain time deposits, bridging loans, daily-interest short-term loans, and some instalment or loan products quoted on a simple basis. These have short terms with no mid-term interest roll, so simple interest is simple and matches the cash-flow structure. Second, ease of quoting and calculation: the simple formula (principal × rate × term) is intuitive and easy to split by day or month (e.g. overdue interest, penalty, daily accrual). Third, it is about 'who benefits': to the depositor (you receiving interest) compounding is better, but to the borrower (you paying) simple interest means less interest paid — so some loans use simple interest, which is good for the borrower. Conversely a 'low-rate' simple loan, converted to compound or EAR, may cost about the same or more; watch the term and method. How to choose: (1) for deposits/investments with similar rates, prefer compounding and higher compounding frequency for better long-term return; (2) for borrowing, do not just read 'simple/compound' — convert all to EAR and compare true cost including fees; (3) always confirm the stated method (simple/compound, frequency, 365 or 360-day basis). In short, simple interest is not 'worse' but fits specific cases; judge products by converting to a common basis like EAR. Pair with our Compound Interest and EAR calculators.
In Hong Kong, is deposit interest taxable, and must I declare simple-savings interest?
A common question for savers: the good news is that in Hong Kong, interest earned on personal bank deposits generally does NOT need to be taxed, and usually need not be specially declared. First, deposit interest is generally exempt — Hong Kong follows a territorial source principle with a simple tax system and no general 'interest tax' or 'capital gains tax'; for ordinary individual savers, interest from deposits in Hong Kong banks is usually outside both salaries tax and profits tax, which is why Hong Kong is friendly to savers. Second, why no tax? Under the Inland Revenue Ordinance, deposit interest that is non-business personal income is generally outside the taxing scope, and Hong Kong long ago exempted personal deposit interest. So the interest this calculator shows is usually what you actually receive, with no tax reserved. Third, when might it differ? (1) If the interest relates to a business (e.g. company funds, or money-lending as a trade), it may be subject to profits tax; (2) overseas assets/income depend on local tax law and tax residency; (3) some investment 'returns' shown as interest may actually be taxable — check the nature. Fourth, practical advice: forthe vast majority individuals simply keeping money in local banks, the simple-savings interest needs no tax and no special declaration, and the maturity value is your actual proceeds. But if your case involves company funds, money-lending, overseas assets or complex structures, consult an accountant or tax professional and follow the IRD's latest rules. This calculator computes pre-tax interest and maturity only, with no tax adjustment. Pair with our Savings and Fixed Deposit calculators.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.