Turkish lira deposit calculator

How the calculation works

A lira term deposit has three moving parts, and only two of them are known when you sign. The interest rate is fixed, the tax rate is set by regulation, and the exchange rate at maturity is not knowable in advance. The calculator holds the first two constant and lets you move the third.

The sequence is straightforward. Your foreign currency is converted to lira at today's rate. Interest accrues over the term at the agreed rate. Withholding tax is deducted from the interest, not from the principal. At maturity the net lira balance is converted back, at whatever the rate happens to be that day.

Simple interest versus compound interest

This matters more than most people expect on a multi-year deposit. Under simple interest the bank pays the stated percentage on the original principal each year, and nothing accrues on the accumulated interest. A three-year deposit at 35% simple interest produces 105% gross, not the 146% that compounding would produce. Before comparing two offers, establish which basis each one uses. A shorter deposit that you roll over annually may compound; a long fixed term often does not.

Withholding tax on deposit interest

Interest paid on deposits held with Turkish banks is subject to withholding tax at source. The bank calculates and remits it, so the amount that reaches your account is already net. Rates are set by Presidential decree and are differentiated by maturity and by currency, with longer lira maturities taxed at a lower rate than short ones. The rates change from time to time, so the figure that applies to your deposit is the one in force when the account is opened or renewed — ask the bank to state it in writing before you commit, and enter that figure in the calculator.

The break-even exchange rate

This is the single most useful number on the page. It is the exchange rate at which your net lira proceeds convert back to exactly the amount you started with. Below it you are ahead in your own currency; above it you are behind, however attractive the headline interest rate looked.

Reading it as an annual figure helps. If the break-even rate is roughly double today's rate over three years, the deposit works out only if the lira depreciates by less than about a quarter each year over that period. Whether that is a reasonable expectation is a judgement about Turkish inflation and monetary policy, not a question the interest rate answers.

What foreign depositors should know

• Account opening. A Turkish tax identification number is needed to open a bank account, along with a passport and, depending on the bank, proof of address. Some banks also ask for a Turkish mobile number. Requirements differ between banks and change periodically.
• Deposit insurance. Deposits at licensed Turkish banks are covered by the Savings Deposit Insurance Fund up to a limit set annually per depositor per bank. Amounts above that limit are not insured, which is worth weighing when a single large sum sits at one institution.
• Early withdrawal. Breaking a term deposit before maturity usually means losing the agreed rate, and interest is recalculated at a much lower rate or not paid at all. On a multi-year term this is a real constraint, not a formality.
• Double taxation treaties. Turkey has treaties with many countries that may affect how deposit interest is treated in your country of residence, and in some cases the rate applied at source. Whether one helps depends on your residence and on the treaty text.
• Currency-protected accounts. Schemes offering exchange rate protection have existed in various forms and have been modified repeatedly. Availability and terms should be checked at the time, not assumed from what applied a year earlier.

Questions we are asked most often

Is a Turkish lira deposit worth it for a foreign investor?

It depends entirely on the exchange rate at maturity, which is why the calculator puts the break-even rate front and centre. The interest rate alone tells you almost nothing about the outcome in dollars or euros. Comparing the break-even rate against your own view of lira depreciation is the meaningful test.

Do I pay tax twice on the interest?

Withholding tax is deducted in Turkey at source. Whether the same income is also taxable where you live depends on your tax residence and any applicable double taxation treaty. Non-residents are treated differently from Turkish tax residents, and the answer is specific to your situation.

Can I open a deposit account without being in Turkey?

Most banks require personal attendance at a branch for the initial account opening, though a Turkish lawyer holding a properly executed power of attorney can carry out many of the steps. We set out how remote account opening works in practice on a separate page. Practice varies between banks and has changed several times in recent years.

What happens to my deposit if I later apply for citizenship by investment?

Bank deposits held in Turkish banks are one of the qualifying investment routes for citizenship by investment, subject to a minimum amount and a mandatory holding period, and the deposit must be blocked and certified for that purpose. The requirements for a qualifying deposit are stricter than for an ordinary one, so the two should not be conflated.

Talk it through

We advise foreign investors on Turkish bank account opening, tax residency and the citizenship by investment programme. If you are weighing the deposit route against property, bonds or a pension, our route comparison tool puts all of them in dollar terms side by side. If you would like to go over your own numbers, or check how a particular bank's offer is structured, get in touch.

This calculator is provided for general information. It is not investment, tax or legal advice, and using it does not create a lawyer–client relationship. Interest rates, withholding tax rates and exchange rates change; confirm current figures with your bank before making a decision.