Interest Arbitrage Calculator

Compare interest rates across currencies and find the break-even FX rate before your trade loses money.

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How it works

Enter your principal, source and target currencies, both interest rates, term, compound frequency, current FX rate, and optional withholding tax on the target currency. The calculator computes two parallel future values: staying in your source currency vs converting, earning the higher rate, and converting back. It then solves for the break-even exit FX rate — the rate at which both paths yield the same result — and shows a sensitivity table across ±15% FX moves. Everything runs in your browser; no data is sent anywhere.

Common use cases

  • AUD term deposit (0.7% p.a.) vs VND term deposit (7.9% p.a.): see how much VND must weaken before the trade loses money.
  • Classic JPY carry trade: borrow cheap JPY, deposit in AUD — model the FX cushion before the trade reverses.
  • USD vs TRY high-yield: quantify whether the 30%+ rate premium survives likely lira depreciation over 12 months.

Frequently asked questions

What is the break-even exit FX rate?

It is the exchange rate at which converting your target-currency balance back to source gives exactly the same amount as if you had stayed in source all along. If the FX rate on exit is better than break-even, the high-yield trade wins; if it is worse, the source path wins.

What is withholding tax?

Many countries deduct tax at source on interest paid to foreign depositors. Vietnam charges 5% on VND deposit interest for non-residents, for example. The default is 5%; set it to 0 if your jurisdiction does not apply it or if you hold via a tax-treaty structure.

Does compound frequency matter much?

At typical savings-account rates (under 10%), the difference between monthly and annual compounding is small. It matters more at high rates: at 15% p.a. over 5 years, monthly compounding adds roughly 4% to the final value vs annual.

Why does the calculator not fetch live FX rates?

Live rates change by the second and require an API key. Enter today's mid-market rate from your bank or xe.com. The sensitivity table is designed to handle the uncertainty — it shows outcomes across a ±15% range from whatever rate you enter.