Savings Interest Calculator
Installment savings (jeokgeum) means depositing a fixed amount every month, while a time deposit (yegeum) means placing a lump sum until maturity. This calculator supports both, with simple or monthly compound interest, and applies Korea's 15.4% interest income tax (14% income tax + 1.4% local tax) to show your after-tax payout. Choose tax-free to skip the tax.
Actual bank products may differ due to interest calculation methods, preferential rates, and day-count conventions. Use for reference only.
Examples
₩500,000/month × 12 months at 4% (installment, simple, taxed)
The principal is ₩6,000,000 and pre-tax interest is 500,000 × (4%/12) × 78 = ₩130,000. After ₩20,020 tax (15.4%), the after-tax payout is ₩6,109,980. The last deposit earns only one month of interest, so total interest is far less than 4% of the principal.
₩10,000,000 × 12 months at 3.5% (time deposit, simple, taxed)
Pre-tax interest is 10,000,000 × 3.5% × 1 year = ₩350,000. After ₩53,900 interest income tax, the after-tax payout is ₩10,296,100.
The same deposit with monthly compounding
₩10,000,000 at 3.5% for 12 months with monthly compounding earns 10,000,000 × ((1+3.5%/12)¹² − 1) ≈ ₩355,670 pre-tax — about ₩5,670 more than simple interest. The gap grows with longer terms.
FAQ
What is the difference between simple and compound interest?
Simple interest is paid only on the principal, while compound interest adds earned interest back to the principal so it earns interest too. With monthly compounding, interest is added every month, so the same rate yields more than simple interest — and the gap widens over longer terms. Most Korean savings products use simple interest unless labeled otherwise.
How is Korea's 15.4% interest income tax composed?
It combines 14% interest income tax and 1.4% local income tax (10% of the interest income tax), totaling 15.4%. Banks withhold it when paying interest, so the amount credited to your account is already after tax.
At the same rate, which earns more — installment savings or a time deposit?
A time deposit earns more. The full amount sits in the account from day one, whereas each monthly installment is deposited for a shorter period. At 4% for 12 months, installment savings yield only about 2.2% of total principal. Use a time deposit for a lump sum and installment savings for monthly saving.
What is Korea's tax-free comprehensive savings account?
People who meet eligibility requirements — such as those aged 65 or older, persons with disabilities, and independence patriots — can hold up to ₩50 million across all financial institutions fully exempt from the 15.4% interest income tax. Select the tax-free option in this calculator to see the payout under that scheme.
What happens to interest if I withdraw early?
Withdrawing before maturity replaces the contracted rate with an early-termination rate, typically around 0.1–2% per year — far below the contracted rate, and lower the shorter the holding period. Your principal is safe, but interest will be much smaller than expected, so choose a term that fits your cash plan.
Why installment savings interest looks smaller than expected
Depositing ₩500,000 a month for 12 months at 4% suggests 4% of ₩6,000,000 (₩240,000), but the actual pre-tax interest is ₩130,000. The annual rate applies to money deposited for a full year: only the first installment stays for 12 months, while the last one earns interest for just 1 month.
Adding up each installment's deposit period gives 12+11+…+1 = 78 month-units, so simple interest equals monthly deposit × (annual rate/12) × 78. The effective return on total principal ends up slightly above half the advertised rate.
Korean tax-advantaged savings schemes
Regular deposit interest in Korea is subject to 15.4% withholding tax. The tax-free comprehensive savings account (for those 65+, persons with disabilities, etc., up to ₩50 million) is fully exempt. Deposits by members of mutual finance cooperatives (Nonghyup, Suhyup, credit unions, Saemaul Geumgo) are exempt from the 14% income tax on up to ₩30 million, leaving only the 1.4% special rural development tax.
An ISA (Individual Savings Account) exempts up to ₩2 million of interest and dividend income (₩4 million for lower-income holders), with the excess taxed separately at 9.9%. The same rate can produce different take-home amounts depending on tax treatment, so check before opening an account.
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