Simple interest calculator
Calculate maturity payout, after-tax amount, and real value for simple interest products like fixed deposits. Instantly compare with compounding.
Inputs
Simple vs Compound (after tax)
How it works
- Interest = Principal × Rate × Years: Simple interest formula — interest stays the same every year.
- Monthly payout: Interest earned each month is paid that month. Total equals lump-sum maturity.
- 15.4% tax: Automatically withheld on interest (14% income tax + 1.4% local tax).
- Compound comparison: Same principal, rate, and term compounded monthly — visualized on chart.
FAQ
What is the difference between simple and compound interest?
Simple interest accrues only on the principal. At 5% simple interest on ₩100M, you earn exactly ₩5M per year every year. Compound interest earns interest on the accumulated interest too, growing faster over time. The gap is small for short terms but can reach 1.5–2× over 30 years.
What is the difference between lump sum and monthly payout?
Lump sum collects all interest at maturity. Monthly payout distributes monthly interest as it accrues — useful for regular cash flow. The total interest amount is the same for both, but monthly payout has tax withheld each month.
Is the 15.4% Korean interest tax correct?
For standard Korean deposits and savings accounts, 14% income tax + 1.4% local tax = 15.4% is automatically withheld. Tax-exempt savings, ISA (₩2M / ₩4M limit), and special credit union products may apply different rates — check your product terms.
Which products use simple interest?
Most fixed deposits (정기예금), time deposits, CDs, and MMFs quote interest on a simple basis. Rolling over at maturity creates a compounding effect. Bond coupons are also calculated on simple interest.
How much more does compounding earn?
At ₩100M / 5% / 10 years: simple ≈ ₩150M, compound (monthly) ≈ ₩165M. Over 30 years: simple ≈ ₩250M vs compound ≈ ₩448M — nearly 2×. Compare instantly using the chart and box on this page.
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This calculator is for informational purposes only. Actual tax and interest rates vary by product type and individual circumstances. Consult a tax advisor or financial professional for important decisions.