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  #1  
Old 17-06-2008, 07:15 PM
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Default Fixed Term Deposit - Which type of tax is applicable on the interest?

Looking at the possibilty of investing some cash in a fixed term deposit. Just wondering what the situation is with tax on the interest earned?

My mate reckons Capital Gains would be applicable, but I thought it'd just be under your normal income tax.

Anyone know? And, how is it calculated etc.

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Old 17-06-2008, 07:49 PM
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Yes capital gains tax is applicable in a way that your going to be pretty much making a secondary income with the money you have invested. Much the same as you would with shares and the likes.

Any profit made on a secondary income will be taxed accordingly. Personally i wouldnt bother looking into a fixed term deposit. If your going to lock your money away look into a debenture stock. It's exactly the same you always have the same amount of money, you will never lose it like the stock market.

These sorts of investment options are avaliable from most banks. Debenture stocks give a little more interest then fixed terms and and you can lock it away for either 2,3,6, 12 months. I went that way and made a killing.

At the end of the day tax man will always tax you on capital gains. The more you make the more tax, but its all worth it coz you make more then you get taxxed.

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Old 17-06-2008, 07:56 PM
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how is CGT calculated though?
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Old 17-06-2008, 08:16 PM
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from what i can see in my tax returns they add the amount (interest) into your taxable income. From there its taxed accordingly to do with the amount you earn. So say 30c in the dollar up to 70k or whatever it is.
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Old 18-06-2008, 09:33 AM
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do you have a home loan or investment loan?? if so offset it against that. this way you wont pay any tax nor interest on you home loan dollar for dollar.
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Old 18-06-2008, 09:41 AM
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I don't know the answer to your question but I can recommend a good account though:


I use the bankwest Telenet saver, its a good account and does not lock you in
www.abetterdeal.com.au
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Old 18-06-2008, 09:46 AM
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There is no CGT payable on interest earned on bank deposits.
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Old 18-06-2008, 11:18 AM
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I'm talking about the interest earned from a Fixed Term Deposit Fred, when you say bank deposits, that's not what you mean is it?

No Investment loan or home loan at this point in time.
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Old 18-06-2008, 11:39 AM
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because after all as Zeitgeist told us. Every dollar made is that dollar + X(amount of interest).
No money is untaxed!
ITS A SCAM!!! TELL YOR CHILDRENS!!!1111
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Old 18-06-2008, 12:02 PM
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Can SOMEONE who actually knows, 100%, for sure, please answer the question!
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