Enter your monthly deposit, period, and rates to compare savings account vs investment returns side by side. Use tax options and investment presets to find the best choice for your situation.
Selecting a preset auto-fills the expected return rate.
Standard savings are subject to 15.4% interest income tax.
Enter the amount you plan to save or invest each month. Both options use the same monthly contribution for a fair comparison.
Choose a period from 1 to 20 years. The longer the period, the greater the compounding effect.
Enter the savings annual rate and expected investment return, or choose a preset: Conservative (4%), Moderate (7%), Aggressive (12%).
Check tax-exempt if your savings account qualifies (e.g., ISA). Standard savings accounts are taxed at 15.4% on interest.
It depends on your goals and risk tolerance. Savings accounts guarantee principal and offer predictable returns but at lower rates. Investments offer higher potential returns but carry risk. Historically, long-term (10+ year) investments outperform savings, while savings are better for short-term goals and emergency funds.
Interest earned on savings is taxed at 14% income tax plus 1.4% local income tax, totaling 15.4%. For example, 1M KRW in interest results in 154K KRW in tax, leaving you with 846K KRW. Tax-exempt products (ISA, youth home savings, etc.) can help reduce this.
Simple interest applies only to the principal, while compound interest applies to both principal and accumulated interest. For 10M KRW at 5% over 10 years: simple = 15M KRW, compound = 16.29M KRW. This calculator uses monthly compounding.
The S&P 500's historical average annual return is about 10% (7-8% inflation-adjusted). Korea's KOSPI has averaged roughly 5-7% over the long term. Past performance does not guarantee future results. Diversification and a long investment horizon are key.
ISA (Individual Savings Account) offers tax exemption up to 2M KRW/year. Youth housing subscription savings accounts exempt up to 500K KRW in interest annually. Other products like the soldier future preparation fund and long-term equity funds also offer tax benefits.
Savings accounts guarantee your principal with fixed interest, while investments pursue higher returns through stocks and funds at the cost of accepting risk. Long-term compound growth often favors investment, but savings are ideal for short-term goals and emergency funds.
Compounding means "interest on interest" — the longer your horizon, the more dramatic the effect. Investing 300K KRW/month for 20 years at 7% returns ~190M KRW, while depositing the same in a 3.5% savings account yields only ~103M KRW. The ~87M KRW gap illustrates why long-term investors prioritize growth assets. Always factor in the risk of principal loss with investments.
Experts typically recommend keeping 3-6 months of expenses in savings for emergencies and investing the rest for the long term. Asset allocation should shift with age: 20s-30s favor aggressive (70-80% equities), 40s-50s moderate (50-60% equities), and retirees conservative (bonds and savings-heavy). Matching your allocation to your goals and timeline is the cornerstone of sound personal finance.