Banking January 2026 5 min read
Malta Savings Interest Guide 2026
Understanding compound interest and withholding tax on your savings.
Understanding Compound Interest
Compound interest is interest calculated on both the initial principal and accumulated interest. The formula is:
A = P(1 + r/n)nt
Where:
- A = Final amount
- P = Principal (initial deposit)
- r = Annual interest rate
- n = Compounding frequency per year
- t = Time in years
15% Withholding Tax
Final Withholding Tax
In Malta, interest income from bank deposits is subject to a 15% final withholding tax. This is deducted automatically by the bank.
Key points about the 15% withholding tax:
- Tax is deducted at source by the bank
- No need to declare in your annual tax return
- Applies to Malta tax residents
- Non-residents may have different rates
Current Savings Rates
Savings account interest rates in Malta vary based on:
- Account Type: Regular savings, fixed-term, notice accounts
- Deposit Amount: Higher balances may earn better rates
- Term Length: Longer fixed terms typically offer higher rates
As of 2026, typical savings rates range from 1% to 4% depending on the account type.
Maximizing Your Savings
Smart Savings Tips
- • Compare rates across different banks
- • Consider fixed-term deposits for better rates
- • Set up automatic monthly contributions
- • Take advantage of compound interest by starting early
Calculate Your Savings Growth
See how your savings will grow with compound interest.
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