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Practical guide

Deposits, bonds, savings and ROI — what should be compared?

Each investment calculator answers a different question. A deposit covers one term, bonds may compound, savings add contributions, while ROI compares two values without measuring time.

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Simple Tools editorial teamReviewed: 4 August 2026

Match the model to cash flows

A deposit paid at maturity may use simple interest. Multi-year reinvested capital requires compounding, while a savings plan also needs contribution dates.

Check whether a rate is nominal or effective and how often compounding occurs.

Gross, net and real value

Gross interest is not the amount available after tax and fees. A nominal value also omits loss of purchasing power from inflation.

When comparing products, use the same tax convention, time period and realistic contribution schedule.

ROI does not measure everything

Simple ROI divides gain by cost. Two projects with 20% ROI differ greatly if one takes a month and the other five years.

Cash flows, risk, liquidity, tax and the alternative cost of capital may be necessary for a decision.

Frequently asked questions

What does this guide explain about “Match the model to cash flows”?

A deposit paid at maturity may use simple interest. Multi-year reinvested capital requires compounding, while a savings plan also needs contribution dates. Check whether a rate is nominal or effective and how often compounding occurs.

What does this guide explain about “Gross, net and real value”?

Gross interest is not the amount available after tax and fees. A nominal value also omits loss of purchasing power from inflation. When comparing products, use the same tax convention, time period and realistic contribution schedule.

What does this guide explain about “ROI does not measure everything”?

Simple ROI divides gain by cost. Two projects with 20% ROI differ greatly if one takes a month and the other five years. Cash flows, risk, liquidity, tax and the alternative cost of capital may be necessary for a decision.

Calculators covered by this guide

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