Accurately calculate the maturity amount for installment savings and time deposits. Compare after-tax interest and total amount received by tax type at a glance.
Installment savings and time deposits are among the safest financial products in South Korea, offering guaranteed interest and serving as the foundation of personal finance. This calculator accurately computes the maturity amount for installment savings (regular deposits) and time deposits (lump-sum deposits), helping you compare after-tax interest across different tax types. Try various conditions to find the most advantageous product for your needs.
Installment savings require regular monthly deposits over a set period, while time deposits involve a one-time lump-sum deposit. Choose installment savings if you can commit to monthly deposits, or time deposit if you already have a lump sum available. Installment savings require setting a monthly amount and duration, while time deposits need a deposit amount and duration.
For installment savings, enter your monthly deposit amount. For time deposits, enter the lump-sum amount. Enter the published annual interest rate for the financial product you plan to join. Duration ranges from 3 to 36 months; generally, longer durations offer higher interest rates. Compare calculations with multiple durations to find the best option.
Standard tax (15.4%) applies to most financial products and includes income tax (14%) plus local income tax (1.4%). Reduced tax (9.5%) applies to certain cooperative and credit union products. Tax-free (0%) applies to government policy products like Youth Hope Savings. Your actual received amount varies significantly by tax type, so select the correct one for accurate calculations.
A strategy of depositing 300K-500K KRW monthly into installment savings to build investment seed money within 1-2 years. Youth-preferred savings products offer high interest rates and tax-free benefits simultaneously for maximum efficiency. Setting up automatic transfers helps build consistent savings habits naturally.
It's advisable to keep 3-6 months of living expenses in time deposits for unexpected medical bills or job loss. Short-term deposits (3-6 months) offer good liquidity while earning higher interest than regular savings accounts. Emergency funds are better suited for safe deposits rather than investments.
When you have a target amount like 30M KRW for wedding funds or 50M KRW for housing deposits, use the calculator to determine the required monthly deposit and duration. Comparing various interest rate and duration combinations helps create the most realistic savings plan.
Rather than immediately investing a lump-sum retirement payment, first place it in a 6-12 month time deposit to safely earn interest while planning future investments. Amounts under 50M KRW are protected by the Depositor Protection Act, ensuring safety.
Installment savings require monthly deposits of a fixed amount, with principal and interest paid at maturity. Time deposits involve depositing a lump sum at once, with principal and interest paid at maturity. Even at the same interest rate, time deposits earn more interest because the full amount earns interest from day one, whereas installment savings accumulate interest only as each monthly deposit is made. For example, depositing 1M KRW monthly for 12 months at 3% annual rate yields about 195K KRW in interest, but depositing 12M KRW as a time deposit at 3% for 12 months yields 360K KRW.
Installment savings interest is calculated on each monthly deposit for its remaining months until maturity. The formula is 'monthly deposit x annual rate/12 x n(n+1)/2', where n is the total number of months. For example, with 500K KRW monthly, 4% annual rate, and 12 months: the first month's deposit earns interest for 12 months, the second for 11 months, and the last for just 1 month. This means the first deposit earns the most interest while the final deposit earns the least.
The actual amount received varies significantly by interest income tax type. Standard tax takes 15.4% of interest (14% income tax + 1.4% local income tax). Reduced tax takes only 9.5% (special agricultural tax), providing about 38% tax savings. Tax-free means 0% tax with full interest received. For example, on 1M KRW of interest: standard tax yields 846K KRW, reduced tax yields 905K KRW, and tax-free yields the full 1M KRW. Always choose reduced tax when available.
Early termination applies a much lower penalty rate instead of the agreed rate. Typically, less than 1 month gets 0.1% annual rate, less than 3 months gets 30-40% of the agreed rate, less than 6 months gets 50-60%, and less than 1 year gets 70-80%. For example, terminating a 4% savings at 6 months may only yield 2-2.4%. Therefore, sign up for amounts you can maintain until maturity and keep emergency funds separate. Some banks offer partial withdrawal options, so check before signing up.
Under the Depositor Protection Act, up to 50 million KRW (principal + interest combined) per person per financial institution is protected. 'Per financial institution' means the total of all deposits/savings at the same bank. Therefore, amounts exceeding 50M KRW should be distributed across multiple banks for safety. Protected products include deposit-type products at banks, savings banks, insurance companies, and securities firms. Investment products (funds, ELS, etc.) are not covered. Agricultural and fisheries cooperatives have separate deposit protection systems.
Simple interest savings calculate interest only on principal, while compound interest savings calculate interest on interest as well. Most retail savings products in South Korea use simple interest, and this calculator also uses simple interest. Compound savings are offered only in some promotional products and are slightly more advantageous at the same rate. However, since savings terms are typically 1-3 years, the difference between simple and compound interest is minimal. For 12 months, the difference is approximately 0.01-0.05%p. For long-term investing where compound effects are significant, use a separate compound interest calculator.
This calculator uses simple interest and may differ slightly from actual financial institution calculations. Installment savings calculations are based on fixed monthly deposits; flexible deposit products may yield different results. Interest rates are based on the fixed agreed rate at sign-up; variable rate products may differ at maturity. Tax calculations are based on interest income tax; individuals subject to comprehensive financial income taxation may incur additional taxes. Please consult your financial institution for exact maturity amounts.