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Hong Kong Time Deposit Calculator

Calculate the maturity value and tax-free interest on a Hong Kong bank time deposit.

Published

Written by PennyCompass Team

Maturity value and tax-free interest on a time deposit.

Maturity value

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Interest (tax-free)

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Principal

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Your breakdown

Updates live as you type
StepAmount (HKD)

Worked example

Suppose you place HK$300,000 into a 12 month time deposit at a 3.5 percent annual rate. The interest is HK$300,000 times 3.5 percent times one year, which is HK$10,500. Hong Kong does not tax interest earned by individuals on a bank time deposit, so the full HK$10,500 is yours and the maturity value is HK$310,500. A shorter tenor is pro-rated, so the same deposit over six months would pay HK$5,250. The rate is fixed for the agreed term, which is the trade-off for locking the money away. Breaking a time deposit early usually means forfeiting some or all of the interest, so only commit funds you will not need before maturity.

How it is calculated

The tool computes simple interest on the principal for the term you choose: principal times the annual rate, pro-rated by the number of months over twelve. The maturity value is the principal plus that interest. Because Hong Kong has no interest or savings tax for individuals, the interest is received in full and the tax line is zero. This matches how a standard fixed-term deposit is quoted, where the bank states an annual rate for a set tenor. The figure assumes interest is paid at maturity rather than compounded during the term, which is the usual structure for a single time deposit. For a rolling deposit that reinvests interest each period, the compounding tool gives the higher effective return.

Frequently asked questions

Is time deposit interest taxed in Hong Kong?
No. Interest earned by an individual on a Hong Kong bank time deposit, also called a fixed deposit, is not taxed, because Hong Kong has no interest or savings tax. The interest this tool shows is yours in full at maturity. The figure is simple interest for the term you enter: principal multiplied by the annual rate, pro-rated for the number of months.
What happens if I break a time deposit early in Hong Kong?
Most Hong Kong banks will allow early withdrawal but will forfeit some or all of the accrued interest as a penalty. Some banks reduce the rate to the prevailing savings rate for the period already held, while others simply pay zero interest. Always confirm the early-redemption terms with your bank before committing funds.
What is the minimum deposit for a Hong Kong bank time deposit?
Minimums vary by bank but are commonly HK$10,000 for standard retail time deposits at major Hong Kong banks. Some promotional rates for short tenors require higher minimums of HK$100,000 or above. Foreign-currency time deposits may have different minimums stated in the relevant currency.
How does a time deposit differ from a savings account in Hong Kong?
A time deposit locks your money for a fixed term at a fixed rate, typically offering a higher rate than a passbook or savings account in exchange for that commitment. A savings account allows withdrawals at any time but pays a lower variable rate. For funds you will not need for one month or more, a time deposit usually provides better returns in Hong Kong.

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Sources

  1. Inland Revenue Department — Salaries Tax and Tax Rates, Inland Revenue Department, Hong Kong
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