Fixed Deposit Calculator for Sri Lanka - Interest, Tax and AER
Enter your deposit, the rate your bank quotes and the term to see the interest, the tax taken off it, what you get back and the annual effective rate (AER).
Maintained by Hirantha Sandaruwan Lakshan. Rules checked 13 October 2026 against Inland Revenue Department circular SEC/2025/E/02: advance income tax on interest or discount on deposits and 5 more sources.
About this tool
Choose whether the interest is paid at maturity, every month or every year. Everything is worked out in your browser, and nothing you type is sent anywhere.
How it works
In the Sri Lankan bank rate tables we checked on 13 October 2026 (People's Bank and National Savings Bank), the rate for a deposit paid at maturity behaves as a simple yearly rate: the effective rate column in those tables only comes out right that way. So the interest for the term is the deposit times the rate times the months, divided by 12, whichever payout you choose. Rate cards usually show a lower rate for monthly payout than for payment at maturity, so enter the rate that goes with the option you pick.
The AER is the compound yearly rate that matches the quoted rate when every payment is reinvested at that rate. For monthly payout it is (1 + rate / 12) to the power 12, minus 1. For interest at maturity it is (1 + rate x years) to the power 1 / years, minus 1, so a 6 month deposit quoted at 7.5% has an AER of 7.64%, and a 12 month deposit paid at maturity has an AER equal to its quoted rate. The AER lets you compare offers that pay in different ways.
Tax is a box you control. On 13 October 2026 we read the Inland Revenue Department (IRD) documents. Circular SEC/2025/E/02 of 28 March 2025 says a bank deducts advance income tax (AIT) of 10% from deposit interest under section 84A(1A) of the Inland Revenue Act, No. 24 of 2017, from 1 April 2025. A resident individual whose assessable income from all sources is Rs. 1,800,000 or less may give the bank a self-declaration so that none is deducted: notice SEC/PN/IT/2026/01 of 24 March 2026 covers 2026/27 and later years, and notice SEC/PN/IT/2026/02 of 8 June 2026 lists the self-declaration among the changes made by the Inland Revenue (Amendment) Act, No. 11 of 2026. Interest on approved foreign currency accounts is outside the deduction, so use 0 for those. The box starts at 10, and you can enter 0. Tax rules change often, so confirm the current position with your bank or the IRD.
The tool has no bank's rates in it. It also leaves out early-withdrawal penalties, fees, bonus rates and your bank's own rounding, so the last cents can differ from your deposit advice.
Worked examples
Rs. 1,000,000 at 8% for 12 months, paid at maturity
The interest is Rs. 80,000.00. After 10% tax (Rs. 8,000.00) you keep Rs. 72,000.00 and get back Rs. 1,072,000.00. The AER is 8.00% before tax and 7.20% after tax. The 8% is an example rate, not any bank's offer.
Rs. 1,000,000 at 7.5% for 24 months, paid monthly
Each month you receive Rs. 6,250.00 before tax, which is Rs. 5,625.00 after 10% tax. Total interest is Rs. 150,000.00 before tax and Rs. 135,000.00 after. The last day pays Rs. 1,005,625.00: your deposit plus the last month's interest. The AER is 7.76%.
Rs. 500,000 at 9% for 36 months, no tax
Interest at maturity is Rs. 135,000.00, so you get back Rs. 635,000.00. Because the interest is simple, the AER is 8.29%, lower than the 9% quoted. Compare AERs, not quoted rates, when the terms differ.
Rs. 1,000,000 at 8.5% for 30 months, paid every year
After 10% tax you receive Rs. 76,500.00 at the end of month 12 and again at month 24, then Rs. 38,250.00 plus your deposit on the last day. Before tax those payments are Rs. 85,000.00 and Rs. 42,500.00. The AER is 8.54%.
How the payout options and the AER work
| Payout option | When the interest is paid | AER formula used |
|---|---|---|
| At maturity | All at once on the last day | (1 + rate x years) to the power 1 / years, minus 1 |
| Every month | One twelfth of a year's interest each month | (1 + rate / 12) to the power 12, minus 1 |
| Every year | A full year's interest after each 12 months, the rest on the last day | ((1 + rate) to the power whole years x (1 + rate x part year)) to the power 1 / years, minus 1 |
Frequently asked questions
How is fixed deposit interest calculated in Sri Lanka?
On the quoted simple rate: deposit x yearly rate x months / 12, for every payout option. Rate cards give a separate rate for each option, so use the one for the option you choose. Your bank's deposit advice is the final word because it may round each payment.
What is the AER on a fixed deposit?
The annual effective rate is the yearly rate you would earn if every payment were reinvested at the same rate and compounded once a year. It puts monthly payout and payment at maturity on the same footing, which the quoted rates alone do not. Compare AER with AER.
Is tax deducted from fixed deposit interest in Sri Lanka?
Yes, normally. On 13 October 2026 the Inland Revenue Department's circular said banks deduct advance income tax of 10% from deposit interest, unless an eligible resident individual (assessable income of Rs. 1,800,000 or less) has given the bank the Department's self-declaration. The rule has been amended more than once, so confirm it with the Department or your bank. Enter 0 in the tax box to see interest before tax.
Is it better to take the interest monthly or at maturity?
It depends on whether you need the income. The monthly rate on a rate card is usually lower than the at-maturity rate, so compare the AER of the two offers. If the AERs are close, you are paid about the same either way and monthly payout only helps if you need the cash each month.
Does this calculator know my bank's rate?
No. Copy the rate for your payout option from the bank's rate card or your deposit advice. The tool does not hold or claim any bank's rates, and the examples on this page use made-up round rates.
What happens if I withdraw the deposit early?
Banks set their own early-withdrawal terms, often a lower rate or a deduction, and this tool does not model them. Ask your bank for the terms in your deposit agreement before you commit.
Sources & references
- Inland Revenue Department circular SEC/2025/E/02: advance income tax on interest or discount on deposits (28 March 2025)
- Inland Revenue Department notice SEC/PN/IT/2026/01: self-declaration for interest income, 2026/27 and later years (24 March 2026)
- Inland Revenue Department notice SEC/PN/IT/2026/02: changes made by the Inland Revenue (Amendment) Act, No. 11 of 2026, item 10.2 on the self-declaration (8 June 2026)
- Effective interest rate (annual equivalent rate) - Wikipedia
- A Sri Lankan bank's rate table with At maturity, Monthly and AER columns (People's Bank). Used only to check the AER method; none of its rates are used here.
- A second bank rate table with an effective interest rate column (National Savings Bank), also used only to check the AER method
Updated Oct 13, 2026