Calculate the after-tax maturity interest for time deposits and installment savings accounts. Enter the principal, annual rate, period, and tax type to instantly see pre-tax interest, tax, after-tax interest, and maturity amount.
| Tax Type | Tax Rate | Income Tax | Local Income Tax | Description |
|---|---|---|---|---|
| General Tax | 15.4% | 14% | 1.4% | Standard rate for general financial products |
| Preferential Tax | 9.5% | 8% | 1.5% | Cooperative institution member deposits (limit 30M KRW) |
| Tax Exempt | 0% | 0% | 0% | ISA, tax-free comprehensive savings, etc. |
Choose between Time Deposit (lump-sum deposit) and Installment Savings (monthly payments). Time deposits place a lump sum for a fixed period, while installment savings require regular monthly contributions. The interest calculation method differs between the two, so select the correct product type.
For deposits, enter the principal amount. For savings, enter the monthly payment. Enter the annual interest rate for the product you are considering. If preferential rates apply, enter the final combined rate. Enter the period in months.
Choose from General Tax (15.4%), Preferential Tax (9.5%), or Tax Exempt (0%). Preferential tax applies to specific products like cooperative institution deposits. Tax exemption applies to ISA accounts, tax-free comprehensive savings, and similar products.
Click Calculate to see pre-tax interest, tax amount, after-tax interest, and maturity amount. For installment savings, the total principal paid is also shown. This helps you understand the actual amount you will receive at maturity.
Time deposits use simple interest: Interest = Principal × Annual Rate ÷ 100 × Period (months) ÷ 12. For example, depositing 10 million KRW at 4.5% for 12 months gives 450,000 KRW pre-tax interest. Installment savings use a different formula: Interest = Monthly Payment × Annual Rate ÷ 12 ÷ 100 × Period × (Period+1) ÷ 2. For example, 500,000 KRW monthly payments at 4.5% for 12 months gives approximately 146,250 KRW pre-tax interest. Both products are subject to withholding tax on interest, with general tax at 15.4% (income tax 14% + local income tax 1.4%).
Calculate how much to save monthly in an installment savings account to reach a target amount for a wedding, deposit, or car purchase. By factoring in after-tax returns, you can create a realistic savings plan.
When comparing deposit products from different banks, calculate and compare actual after-tax maturity amounts rather than just the advertised rates. Understanding the real difference between preferential and general tax products helps you choose the most advantageous option.
Individual Savings Accounts (ISA) offer tax exemption benefits, resulting in higher after-tax returns compared to regular deposits. Calculate how much more interest you receive under tax-exempt conditions versus general taxation to quantify the tax savings benefit.
A time deposit involves placing a lump sum with a financial institution for a fixed period, receiving principal and interest at maturity. Installment savings require monthly contributions, with the sum of principal and interest paid at maturity. If you have a lump sum, a time deposit is more suitable; if you want to save monthly, installment savings are better. Since installment savings are deposited monthly, the average investment period is shorter, resulting in lower total interest at the same rate compared to a time deposit.
It consists of income tax (14%) and local income tax (1.4%, which is 10% of income tax). This is applied through withholding tax, where the financial institution deducts the tax before paying interest. If annual interest income exceeds 20 million KRW, it must be reported as comprehensive income. The preferential rate (9.5%) includes rural development tax (1.5%), and tax-exempt products have no tax.
The preferential tax rate (9.5%) applies to cooperative institution member deposits at NH Nonghyup, Suhyup, credit unions (Sinheop), Saemaul Geumgo, etc. After qualifying as a member, eligible deposits receive the preferential rate. The limit is 30 million KRW per person, with amounts above this subject to general taxation. Tax-free comprehensive savings (5,000-man-won limit) are available to those aged 65+, people with disabilities, and basic livelihood recipients.
For time deposits, the entire principal is deposited from start to finish, so interest is simply Principal × Rate × Period. For installment savings, the 1st payment earns interest for the full period, the 2nd payment for one month less, and the final payment earns only one month of interest. This is expressed as: Interest = Monthly Payment × Rate/12 × Period × (Period+1) / 2, which uses the arithmetic series sum concept.
Tax on interest income is withheld at the time interest is actually received. For early termination before maturity, a lower early termination rate applies, reducing the interest, and tax is withheld on that amount. If left un-renewed after maturity, a 'post-maturity interest rate' applies, which is generally very low.
The FSS-operated 'FinLife (finlife.fss.or.kr)' service lets you compare deposit and savings rates by bank, period, and amount. Internet banks (Kakaobank, K-Bank, Toss Bank) often offer higher rates than traditional banks, and regional banks and savings banks may also provide relatively high rates. However, savings bank deposits are only protected up to 50 million KRW per person under the Depositor Protection Act.
Learn everything about interest calculation methods, tax deductions, and tax-saving strategies for time deposits and installment savings in Korea.
Time deposits and installment savings are the most fundamental savings tools in the Korean financial market, offering principal protection and stable interest income. Time deposit interest is calculated using the simple interest formula: Principal × Annual Rate ÷ 100 × Period (months) ÷ 12. For example, depositing 10 million KRW at 4.5% for 12 months yields 450,000 KRW in pre-tax interest. Installment savings have a more complex calculation because contributions are made monthly. The 1st payment earns interest for the entire period, while the last payment earns only one month of interest. The formula is: Interest = Monthly Payment × (Annual Rate ÷ 12 ÷ 100) × Period × (Period+1) ÷ 2. This is based on the arithmetic series sum concept. Even with the same amount and rate, installment savings generate less interest than time deposits due to this structural difference. As of 2026, major bank time deposit rates range from about 3-5% per year, with internet banks and savings banks sometimes offering higher rates.
Interest income is subject to 15.4% withholding tax (income tax 14% + local income tax 1.4%). For example, if pre-tax interest is 1 million KRW, 154,000 KRW is deducted as tax, leaving 846,000 KRW. The preferential tax rate (9.5%) applies to cooperative institution member deposits at agricultural, fishery, credit union, and community credit cooperatives, with a limit of 30 million KRW per person. With 1 million KRW in interest, 95,000 KRW is deducted, yielding 905,000 KRW — approximately 59,000 KRW more than with general taxation. Tax exemption (0%) applies to ISA accounts, tax-free comprehensive savings, and long-term housing savings. ISA accounts allow annual contributions of 20 million KRW (total 100 million KRW), with net profits up to 2 million KRW (4 million for lower-income earners) tax-exempt. To maximize tax savings, fill tax-exempt accounts first, then allocate remaining funds to preferential tax, and finally general tax products.
As of 2026, market deposit rates continue to change with the Bank of Korea's benchmark rate and global interest rate trends. During rising rate environments, repeatedly renewing short-term deposits is advantageous; during falling rate environments, locking in long rates with longer-term deposits is better. Under the Depositor Protection Act, each financial institution protects up to 50 million KRW (principal + interest) per person, so funds exceeding this should be distributed across multiple institutions. Internet banks (Kakaobank, K-Bank, Toss Bank) offer relatively higher rates due to lower overhead costs and allow easy account opening through apps. Savings banks offer higher rates but require verification of financial soundness before investing. Use the FSS 'FinLife' service to compare real-time rates across financial institutions and select the optimal product.