i What this calculator does
Quick answer: Compare a guaranteed fixed deposit against an uncertain market return after tax and inflation, at the current 7.25% repo rate. With the default inputs (amount to invest 200 000, fixed deposit rate 8.5), it returns fixed deposit, real value of R242 480.15.
With the repo rate at 7.25% and prime at 10.75% after the September 2026 increase, cash pays meaningfully more than it did. That raises the bar any market strategy has to clear before it is worth the risk.
This compares a fixed deposit against an assumed market return, both after tax and after inflation, so the comparison is in the same units. The interest exemption of R23,800 a year under 65, or R34,500 from 65, is applied.
This calculator is for educational purposes only. Results are estimates and may vary depending on market conditions, spreads, commissions, platform settings, and exchange rates. It should not be considered financial advice.
How to use the Fixed Deposit vs Market Return Calculator
It works immediately. Change one value, leave the others, and the difference belongs to that change.
- 1. Amount to Invest (R)
- 2. Fixed Deposit Rate (%) Typically prime minus a margin
- 3. Expected Market Return (%) Uncertain, unlike the deposit rate
- 4. Years
- 5. Your Marginal Tax Rate (%)
- 6. Expected Inflation (%) CPI was 4.4% in August 2026
The result panel reports:
- Fixed Deposit, Real Value After tax and inflation, guaranteed
- Market, Real Value After tax and inflation, uncertain
Alongside the headline figures, the calculator reports fixed deposit before tax, market before tax, tax on interest, tax on capital gain. Those are the numbers that usually explain why the headline result came out where it did.
Each stage of the arithmetic is set out under the answer, which means you can follow how it was reached.
See also: Bond vs Invest Calculator.
Common results
What the calculator returns as the amount to invest changes, with every other input at its default (fixed deposit rate 8.5, expected market return 11, years 5, your marginal tax rate 31, expected inflation 4.4).
| Amount to Invest | Fixed Deposit, Real Value | Market, Real Value | Difference |
|---|---|---|---|
| R50 000 | R60 620.04 | R67 933.25 | R7 313.21 |
| R100 000 | R121 240.08 | R134 016.27 | R12 776.19 |
| R200 000 | R242 480.15 | R263 033.46 | R20 553.31 |
| R400 000 | R464 348.47 | R521 067.86 | R56 719.39 |
| R1 000 000 | R1 116 254.47 | R1 295 171.04 | R178 916.57 |
| R2 000 000 | R2 202 764.48 | R2 585 343.01 | R382 578.53 |
Figures used in this calculator
The South African constants this calculator relies on, with the page that holds the current value and the date it was last verified.
- TFSA limits: R46,000 a year, R500,000 lifetime, 40% penalty on excess. Source: Tax-Free Savings Account Limits (verified 27 September 2026).
- Retirement deduction cap: 27.5% of income, R430,000 a year. Source: Retirement Fund Contribution Limits (verified 27 September 2026).
- Two-pot savings withdrawal: Once a tax year, minimum R2,000, taxed at marginal rate. Source: Two-Pot Retirement System Reference (verified 27 September 2026).
- Retirement lump sum tax-free portion: R550,000. Source: Retirement Lump Sum Tax Tables (verified 13 October 2026).
- Interest exemption: R23,800 a year under 65, R34,500 from 65. Source: Interest and Dividend Exemptions (verified 29 September 2026).
How the calculation works
There are six inputs to fill in: Amount to Invest, Fixed Deposit Rate, Expected Market Return, Years, Your Marginal Tax Rate and Expected Inflation. Fixed Deposit Rate: Typically prime minus a margin. Expected Market Return: Uncertain, unlike the deposit rate. Expected Inflation: CPI was 4.4% in August 2026. The fixed deposit is R200 000.00 x (1 + 8.50%)^5 = R300 731.34. The interest tax is max(0, R100 731.34 - R119 000.00) x 31% = R0.00. The market is R200 000.00 x (1 + 11.00%)^5 = R337 011.63. The cgt is (R137 011.63 - R50 000) x 40% x 31% = R10 789.44. The breakdown also lists amount invested, fixed deposit interest, interest exemption applied and tax on interest.
A worked example in rand
Take the defaults as a worked case: amount to invest R200 000, fixed deposit rate 8.5%, expected market return 11%, years 5, your marginal tax rate 31% and expected inflation 4.4%. The result is a fixed deposit, real value of R242 480.15, after tax and inflation, guaranteed. Alongside it: market, real value R263 033.46 and difference R20 553.31. Change one input, the amount to invest, to 400 000, and the fixed deposit, real value moves from R242 480.15 to R464 348.47, the market, real value moves from R263 033.46 to R521 067.86 and the difference moves from R20 553.31 to R56 719.39.
How to read the result
The verdict line under the result says: "The market is ahead by R20 553.31 in real terms, but only if it delivers 11.0% a year, which is not guaranteed." That sentence is recomputed on every run; it is a reading of the numbers, not a recommendation. Stay inside the annual limits, R46,000 for a tax-free account and R430,000 for retirement deductions; the excess is penalised at 40% in one case and simply not deductible in the other.
The South African angle
The fixed deposit vs market return calculator is the same arithmetic anywhere; what differs in South Africa is the environment it runs in. Since 1 September 2024 a third of new retirement contributions goes to a savings pot that can be withdrawn once a tax year, taxed at the marginal rate, which has changed how South Africans use retirement funds as emergency money. Living annuity drawdowns must be between 2.5% and 17.5% of the capital a year, a rule the retirement savings calculator respects when it projects income. Retirement fund contributions are deductible up to 27.5% of the greater of remuneration or taxable income, capped at R430,000 a year, so a high earner's cap binds before the percentage does. For the current numbers that sit behind the fixed deposit vs market return calculator, see the tax-free savings account limits reference.
Spotted an outdated figure? If a rate, limit or formula in this calculator no longer matches its source, email us the page and the source. A material correction is dated on the Updates Log.
See also: XIRR and Money-Weighted Return Calculator
Frequently asked questions
What is the interest exemption?
SARS exempts the first portion of local interest from income tax each year, R23,800 for taxpayers under 65 and R34,500 from 65. Interest above that is taxed at your marginal rate, which is why large cash holdings become less attractive as they grow.
Is a fixed deposit really risk free?
It carries no market risk and the rand amount is contractual, but it carries inflation risk: if the after-tax return is below inflation you lose purchasing power with certainty. It also carries bank credit risk, which South Africa's deposit insurance scheme now partially covers.
Why is the market return taxed differently?
Interest is ordinary income taxed in full at your marginal rate. A capital gain has an annual exclusion and only 40% of the remainder is included in taxable income for individuals. That difference favours the market side even before returns are compared.
What return should I assume for the market?
Nobody knows. Long-run equity returns in South Africa have historically been meaningfully above inflation, but any particular five-year period can be negative. Run the calculator at several assumptions rather than one, including a return below the deposit rate.
Does this apply to a tax-free savings account?
No. Inside a TFSA both interest and capital gains are exempt, which changes the comparison entirely. If you have unused annual allowance, using it first is almost always better than either option here.
Where does trading fit in?
Trading profits treated as revenue are taxed at your marginal rate with no exclusion, which puts them on the least favourable side of this comparison. That is worth weighing against the return a strategy needs to produce.
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