Installment Savings Calculator
Calculate maturity amount for regular monthly deposits
Input
Result
This calculator is for informational purposes only and should not be considered as financial advice. Actual values may vary.
What is Installment Savings Calculator?
The Installment Savings Calculator helps you determine how much money you will receive at maturity when you make regular monthly deposits into a savings account. Installment savings (known as jeokgeum in Korean) is one of the most popular savings products in Korea, designed for building up a lump sum through disciplined monthly contributions. Interest is calculated on each deposit for the remaining months until maturity. The first deposit earns interest for the full term, while the last deposit earns only one month of interest. This calculator accounts for the three tax treatment options available in Korea: general taxation at 15.4% (14% income tax plus 1.4% local income tax), preferential taxation at 9.5% for eligible individuals, and tax-free accounts for qualifying young adults or low-income earners. By comparing results across these tax types, you can see how significant the impact of tax treatment is on your final maturity amount. The monthly breakdown table shows your cumulative deposits and balance growth month by month, helping you visualize your savings progress. Whether you are saving for a down payment, emergency fund, or a specific financial goal, this calculator gives you a clear picture of what to expect at maturity and helps you choose the optimal savings plan.
How to Use
- Enter the monthly deposit amount.
- Enter the annual interest rate (%) and term (months).
- Select the tax type.
- Review the net maturity amount and interest details.
Tips & Best Practices
- Maximize your use of tax-free or preferential tax accounts if you qualify, as the tax savings can amount to a significant portion of your interest income.
- Set up automatic monthly transfers on payday to ensure consistent deposits and avoid the temptation to skip months.
- Compare installment savings rates across multiple banks — online-only banks often offer higher rates than traditional brick-and-mortar institutions.
- Avoid early withdrawal whenever possible, as penalty rates typically reduce your earned interest to 50-70% of the contracted rate.
- Consider laddering multiple installment savings accounts with different maturity dates to maintain liquidity while still earning competitive interest rates.
Use Cases
Down Payment Savings
Calculate how much you need to save monthly to accumulate a target down payment amount within a specific timeframe.
Emergency Fund Building
Determine the maturity amount if you commit a fixed monthly amount to build a 6-month emergency fund over 1-2 years.
Tax Impact Comparison
Compare the maturity amounts under general tax, preferential tax, and tax-free options to quantify the benefit of tax-advantaged accounts.
Savings Goal Planning
Enter your target maturity amount and adjust the monthly deposit and term until the calculator shows a result that meets your goal.
FAQ
How is installment savings interest calculated?
Installment savings calculates compound interest on each monthly deposit for the remaining period. The first deposit earns interest for the full term, while the last deposit earns only one month of interest.
What is the difference between preferential tax and tax-free?
General tax takes 15.4% of interest, preferential tax takes 9.5%. Tax-free has no tax. Both preferential and tax-free have eligibility requirements.
What is installment savings (regular savings)?
Installment savings is a financial product where you deposit a fixed amount monthly for a set term and receive the principal plus interest at maturity. It is effective for building up a lump sum.
What makes up the 15.4% tax on savings interest?
It consists of 14% interest income tax plus 1.4% local income tax (10% of interest income tax). This is withheld at source before paying the after-tax interest.
Is my financial data stored?
No, all calculations are performed in your browser and no financial data is sent to or stored on any server.
What happens if I withdraw installment savings early?
Early withdrawal applies a penalty rate (typically 50-70% of the contracted rate) instead of the agreed interest rate, significantly reducing the earned interest.
What is the difference between installment savings and a fixed deposit?
Installment savings involves making monthly deposits over the term, while a fixed deposit places a lump sum at once. For the same total amount, a fixed deposit earns more interest because the entire principal earns interest from day one.
How is interest calculated on installment savings?
Each monthly deposit earns interest for its remaining months. The first deposit earns interest for n months, the second for n-1 months, and so on. Total interest is the sum of interest from all deposits, making the effective yield lower than the stated annual rate.
Who qualifies for tax-free savings accounts in Korea?
Eligibility varies but generally includes individuals aged 15-34 with income below certain thresholds, disabled persons, senior citizens over 65, and recipients of basic livelihood security. Check with your bank for current qualification criteria.
Can I increase my monthly deposit amount during the term?
Most installment savings products require a fixed monthly deposit. Some banks offer flexible savings products where you can vary the amount, but these may offer lower interest rates. Check the specific product terms.
What happens if I miss a monthly payment?
Policies vary by bank. Some allow grace periods or catch-up payments, while others may convert the account to a lower-rate flexible savings. Missing multiple payments may result in early termination at a penalty rate.
Is the interest rate on installment savings fixed or variable?
Most Korean installment savings products offer a fixed interest rate locked in at the time of account opening. Some products may offer variable rates tied to market conditions. Fixed-rate products are generally preferred for predictability.