Maturity value of a bank time deposit, net of the 20% final tax.
Maturity value
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Gross interest
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Final tax (20%)
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Net interest
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What actually hits your account at maturity
A peso time deposit quotes you an annual interest rate, but two things sit between that headline and the cash you collect. First, the term: a 90-day deposit earns only a quarter of the annual rate, not the full year's interest. Second, the tax: bank deposit interest carries a 20 percent final withholding tax that the bank deducts before crediting you. You never see the gross interest land and then pay tax later. The bank takes its 20 percent at source, and what arrives is already net. This calculator follows that exact sequence so the maturity figure is the real number you can spend.
It uses simple interest, not compounding, which matches how most short-term peso time deposits are actually quoted by banks. Interest is computed once over the term and added at the end. For a single fixed term that is the right model, and it keeps the math transparent: principal, times rate, times the fraction of the year your money was locked up.
A PHP 100,000 deposit for 90 days
Take the defaults: PHP 100,000 at 5 percent for 90 days. The interest for the period is PHP 100,000 times 5 percent times 90 divided by 365, which comes to about PHP 1,233 of gross interest. The 20 percent final tax this calculator applies takes roughly PHP 247 of that, leaving net interest near PHP 986. Add that to your principal and the maturity value is about PHP 100,986. Notice how modest the after-tax return on a short term is: locking up PHP 100,000 for three months nets you under PHP 1,000.
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The month convention that shaves a little off your interest
Here is a subtlety worth knowing before you trust the output. When you choose the months unit, the calculator converts each month to exactly 30 days, then divides by a 365-day year. So 12 months is treated as 360 days, not 365. The practical effect is that a deposit you think of as a full year actually earns interest for 360 over 365 of the year, slightly less than a calendar year. On a PHP 250,000 deposit at 5.5 percent for 12 months, that 360-day basis produces about PHP 13,562 of gross interest rather than the PHP 13,750 a true 365-day year would give. It is a small gap, but it explains why a months-based figure can look a touch low against a back-of-envelope estimate.
If you want the figure for a precise calendar period, switch the unit to days and enter the actual number of days the bank will hold your money. Banks state the exact tenor in days on your certificate, so days mode lets you match the bank's own computation more closely than the 30-day month shortcut.
When the 20 percent does not apply
The 20 percent final tax is the standard rate for ordinary peso bank deposits, but it is not universal. Long-term deposits with a tenor of five years or more can be exempt from the final tax entirely if held to maturity, and pre-terminating such a deposit triggers a tiered rate that depends on how long you actually held it. Foreign-currency deposits are taxed at a different rate again. This tool models the plain 20 percent that applies to a standard short or medium peso time deposit, which is the common case. For a five-year product or a dollar account, the rate is different, so do not assume the 20 percent here carries over.
The 20 percent final tax rate is set by the BIR and could change, so treat it as the calculator's working assumption rather than a certified figure, and confirm the current rate and any exemptions with the BIR or your bank before committing a large sum.
Do I have to declare time deposit interest on my tax return?
No. The 20 percent is a final withholding tax, which means the bank settles your entire tax liability on that interest at source. You do not add the interest to your annual taxable income and you do not file anything separately for it. That is what final means: the tax is complete the moment the bank withholds it.
What if I withdraw before maturity?
Pre-terminating a time deposit usually means the bank pays a much lower interest rate than the quoted maturity rate, and sometimes none at all, plus a possible penalty. This calculator assumes you hold to maturity and earn the full quoted rate, so an early withdrawal would yield less than it shows. Check your bank's pre-termination terms before locking in funds you might need.