Short answer
- Gross interest = Principal × Annual rate × Days / 365.
- Net interest = Gross interest × (1 - withholding). 2026 rates: up to 6 months 17.5%, up to 1 year 15%, longer 10%.
- Renewing a short term compounds, because interest earns interest.
- For real return, compare the net annual return with inflation (31.51%).
How is gross interest calculated?
Banks announce term deposit rates as annual rates and calculate them by the day:
The announced rate is always gross. To see what you will actually receive, you need to deduct withholding tax.
Withholding tax and net return
Withholding tax is income tax on deposit interest, deducted by the bank and paid to the state; no separate return is needed. Rates for TRY deposits valid until the end of 2026:
| Term | Withholding |
|---|---|
| Demand and up to 6 months (inclusive) | 17.5% |
| Up to 1 year (inclusive) | 15% |
| Over 1 year | 10% |
Source: Presidential Decree 10041 (Official Gazette 09.07.2025), extended to 31.12.2026 by Decree 11444.
₺3,506.85 × (1 - 0.175) = ₺2,893.15
Examples by term
For ₺100,000 principal with example rates. Rates vary by bank and period; TCMB's policy rate was 37% in September 2026.
| Term | Example gross rate | Gross interest | Withholding | Net interest | Net annual |
|---|---|---|---|---|---|
| 32 days | 40% | ₺3,507 | ₺614 (17.5%) | ₺2,893 | 33.0% |
| 181 days | 38% | ₺18,844 | ₺3,298 (17.5%) | ₺15,546 | 31.4% |
| 365 days | 37% | ₺37,000 | ₺5,550 (15%) | ₺31,450 | 31.5% |
| 400 days | 35% | ₺38,356 | ₺3,836 (10%) | ₺34,521 | 31.5% |
Real return: what you actually gain after inflation
Net interest alone does not show your gain; compare it with inflation to see what happens to purchasing power:
(1 + 0.33) / (1 + 0.3151) - 1 ≈ 1.1%
Annual inflation in Turkey was 31.51% in August 2026. In the 32-day example above the net annual return is 33%, so the real return is about 1.1%. A deposit whose net return is below inflation grows in number but loses purchasing power. We compare the options in protecting your money against inflation.
Enter principal, rate and days in our free deposit calculator to see gross and net interest instantly.
Open CalculatorPractical tips
- Watch welcome rates: The high rate offered to new customers usually applies to the first term only and may have an amount cap.
- Do not miss maturity: Some banks move the money to a demand account at maturity or renew it at a lower rate.
- Know the insurance limit: In 2026 deposits up to ₺1,200,000 per person at each bank are covered by TMSF.
- Keep the emergency fund short-term: Breaking a term deposit loses interest; see our emergency fund guide.
- Compare on a net basis: Different terms have different withholding rates, so gross rates cannot be compared directly.
Frequently asked questions
How is deposit interest calculated?
Gross interest = Principal x Annual rate x Term (days) / 365. Net interest = Gross interest x (1 - withholding rate). For example, 100,000 TL at 40% a year for 32 days gives gross interest of 3,506.85 TL, withholding of 613.70 TL at 17.5% and net interest of 2,893.15 TL.
What is the deposit withholding tax rate in Turkey in 2026?
For TRY deposits: 17.5% on demand and up-to-6-month deposits, 15% up to 1 year, 10% over 1 year. These rates took effect on 9 July 2025 and were extended to 31.12.2026 by a decree dated 20.06.2026.
Does deposit interest beat inflation?
Real return is found by comparing net interest with inflation. Annual inflation in Turkey was 31.51% in August 2026. A deposit with a net annual return above that earns in real terms; below it, it loses. Formula: (1 + net return) / (1 + inflation) - 1.
Is my deposit protected?
TRY and foreign currency deposits are insured by TMSF up to 1,200,000 TL per person at each bank for 2026. The limit covers principal plus accrued interest, and accounts at different banks are insured separately.
Sources
butce.app Editör Ekibi
This guide was written by the team behind butce.app, a budgeting app for tracking income, expenses, card installments and loans. Figures were checked against the official sources listed above; the article was last reviewed on .
This content is general information, not investment, tax or legal advice. Rates change, so check the official source before you decide.
