Savings account vs fixed-term deposit
Compare how much your money earns in a high-yield savings account versus a fixed-term deposit for the same amount and term, based on each product's APY.
Results
Which one is better?
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Final balance with the savings account
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Final balance with the deposit
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Difference between both options
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Both products are compared by compounding their APY over the chosen term: final balance = capital × (1 + APY/100)^(months/12). Since APY is already annualized, there's no need to know each product's actual compounding frequency to compare them on a like-for-like basis.
When should you use this calculator?
This calculator helps you decide between two of the most common savings products for money you don't want to put into stocks: a savings account (no fixed term, available anytime) and a fixed-term deposit (guaranteed rate for a locked-in period, with a penalty for early withdrawal). Enter the amount, the term, and each product's APY to see which one earns more over that specific period.
How it is calculated
The calculation compounds each product's APY over the same amount and term: final balance = capital × (1 + APY/100)^(months/12). Both use APY rather than the nominal rate precisely because APY already accounts for each product's compounding frequency, so two products with the same APY give the same result even if one pays interest monthly and the other at maturity.
Practical example
With the default values — €10,000 for 12 months, a savings account at 2.5% APY versus a deposit at 3% APY — the savings account ends with €10,250 and the deposit with €10,300: the deposit wins by €50 in this example. The gap grows with the amount and the term, but both APYs can also change: the deposit's rate is locked in when you open it, while a savings account's rate can go up or down during the term at the bank's discretion.
Common mistakes
The most common mistake is comparing the advertised nominal rate instead of the APY, which can lead to the wrong conclusion if one product compounds more often than the other. The second common mistake is ignoring liquidity: a fixed-term deposit almost always penalizes early withdrawal (reduced interest or a fee), while a savings account usually lets you withdraw at any time with no penalty.
Practical tips
If you won't need the money during the term and the deposit offers a clearly better APY, it's usually worth it. If you value being able to access the money without penalty (for an emergency fund, for example), a savings account is usually more suitable even with a somewhat lower APY. Both products are typically taxed the same way as investment income, so taxation usually isn't the deciding factor between the two.
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Frequently asked questions
What's the difference between a savings account and a fixed-term deposit?
A savings account has no fixed term and lets you withdraw money at any time, while a fixed-term deposit locks up your capital for a set period in exchange for a guaranteed rate, with a penalty if you withdraw early.
Why compare using APY instead of the nominal rate?
Because APY already reflects each product's compounding frequency (monthly, quarterly, at maturity...), so it lets you compare two different products on a like-for-like basis without needing that extra detail.
What happens if I need the money before the deposit matures?
Almost all fixed-term deposits penalize early withdrawal, usually by reducing the interest earned or charging a fee. Check the exact terms before opening one if there's any chance you might need the money early.
Are the interest from both products taxed the same way?
In most countries, yes — both are typically taxed as investment/savings income under similar rules, though exact rates and thresholds vary by country. Taxation usually isn't the deciding factor between the two.
Can I have a savings account and a deposit at the same time?
Yes, they're not mutually exclusive: it's common to split your savings between both, keeping the portion you want instantly accessible in the savings account and locking up the rest you won't need in the deposit.
Can a savings account's APY change during the term?
Yes, unlike a deposit (whose APY is locked in when you open it), a savings account's APY is usually variable and the bank can change it at any time, typically with advance notice.