How to use the interest calculator
- Choose deposit or savings and enter the amount, annual rate and term.
- Select the interest method (simple or monthly compound) and the tax type.
- Principal, interest before tax, tax and the amount received after tax are shown instantly.
Simple vs compound interest
With simple interest, interest accrues only on the principal; with compound interest, interest also earns interest. If you deposit 10 million at 3% a year for 12 months, simple interest gives 300,000 and monthly compounding gives about 304,160. The longer the term, the bigger the gap. For a savings account, each monthly payment earns interest only for the time it has been deposited. Paying 1 million a month at 3% simple interest for 12 months earns 195,000 in interest, far less than a 12 million deposit even though the total paid in is 12 million.
Tax calculation
In Korea, ordinary interest income is withheld at 15.4%, the sum of 14% interest income tax and 1.4% local income tax. This calculator multiplies the pre-tax interest by the selected rate to get the tax and shows principal plus interest minus tax as the amount received after tax. For tax-free products choose 0%.
Things to know
- Rates vary with preferential conditions, so enter the rate that actually applies.
- If you withdraw early, a lower rate than the contract rate may apply.
- Entering several products under the same conditions makes them easy to compare.
What to check when choosing a product
Even at the same rate, the amount you receive differs depending on whether interest is simple or compound and whether the rate is before or after tax. Before you sign up, check the conditions for preferential rates and the rate applied for early withdrawal, and confirm deposit insurance coverage and limits with the financial institution. Entering the same conditions for each product here lets you see at a glance which pays more after tax.
Notes & limitations
This calculator is a reference tool simplified to monthly steps and does not recommend any financial product. Check the exact amount with the institution you plan to use.
FAQ
The amount differs from what my bank paid.
Banks calculate interest daily and preferential rates and early withdrawal differ, so the real amount may differ. This calculator uses a simple monthly method.
Why is savings interest much lower than a deposit?
Because you pay into a savings account month by month, the average time each amount is deposited is about half, so interest is lower even for the same total.
Which tax rate should I pick?
Choose 15.4% for standard taxation or 0% for tax-free. For other rates such as preferential tax, check and select it yourself.