Deposit and savings interest calculator
Maturity value, interest after tax, and the gap between the advertised rate and the real return.
Input
The same amount paid in every month.
The advertised annual rate, including any bonus you qualify for.
In months: 12 for a year, 36 for three.
A standard Korean account has 15.4% withheld at maturity (14% income tax plus 1.4% local).
Result
Amount at maturity
₩6,109,980
Includes ₩6,000,000 paid in
- Total paid in
- ₩6,000,000
- Interest before tax
- ₩130,000
- Tax withheld
- − ₩20,020
- Interest after tax
- ₩109,980
- Effective annual return
- 1.83%advertised rate 4.00%
- Average holding period
- 6.5monthshow long the average unit is actually on deposit
Why the return is below the rate
The rate says 4.00% but the return is 1.83%. Only the first instalment is held for the full term and the last for a single month, so the average won sits on deposit for just 6.5 months. Tax of 15.4% then comes off the interest.
The same money as a lump sum
What the instalment total would have earned had it all been deposited at the start. The difference is the cost of paying in over time.
| Product | Before tax | After tax |
|---|---|---|
| Monthly instalments | ₩130,000 | ₩109,980 |
| Lump sum | ₩240,000 | ₩203,040 |
One year of interest, after tax
| Rate | Lump sum ₩6,000,000 | ₩500,000 a month |
|---|---|---|
| 2.0% | ₩101,520 | ₩54,990 |
| 2.5% | ₩126,900 | ₩68,738 |
| 3.0% | ₩152,280 | ₩82,485 |
| 3.5% | ₩177,660 | ₩96,233 |
| 4.0% | ₩203,040 | ₩109,980 |
| 4.5% | ₩228,420 | ₩123,728 |
| 5.0% | ₩253,800 | ₩137,475 |
| 6.0% | ₩304,560 | ₩164,970 |
The amount actually paid depends on the bank's day-count convention, rounding, whether the account is closed early, and whether bonus-rate conditions were met. Korean deposit insurance covers ₩50,000,000 per institution.
How to use
- Choose a lump-sum deposit or a monthly instalment plan.
- Enter the amount, the annual rate and the term in months.
- Pick simple or monthly compounding and the tax rate — 15.4% for a standard Korean account.
- Read the maturity value, the interest after tax, and the effective return.
- For an instalment plan, compare it against the same money deposited up front.
Frequently asked questions
Why does a 4% instalment plan not return 4%?
Only the first instalment is held for the full term; the last is held for one month. Over twelve months the average unit sits on deposit for 6.5 months, so it earns roughly half the interest. Tax then takes 15.4% of that.
What does 500,000 a month at 4% for a year earn?
130,000 before tax and about 109,980 after — an effective 1.83% on the 6,000,000 paid in. The same 6,000,000 deposited at the start would earn 240,000 before tax.
What makes up the 15.4%?
14% income tax plus a local tax of 1.4%, which is 10% of the income tax. The bank withholds it at maturity, so the account receives the net figure. Some tax-exempt account types avoid it entirely.
How much does monthly compounding add?
Little over short terms: 10,000,000 for one year at 4% earns 400,000 simple against 407,415 compounded. The gap widens with the term, so it is worth checking on anything over three years.
What happens on early closure?
A much lower early-termination rate applies instead of the agreed one. These figures assume the account is held to maturity.
About the Savings calculator
The useful output here is not the maturity value but the distance between the advertised rate and what actually arrives. An instalment plan quotes an annual rate while holding most of the money for a fraction of the year.
Tax then removes 15.4% of the interest. Together those two effects turn a 4% plan into roughly a 1.8% return — and once that number is visible, instalment plans, lump-sum deposits and other products can be compared on the same basis.
If the money already exists, a lump sum earns more. If the point is to build a saving habit, the lower effective return is the price of that, which is a reasonable trade to make knowingly rather than by accident.