Why the Same Monthly Contribution Produces Different Interest at Maturity

How Installment Savings Interest Is Calculated

A time deposit takes a lump sum, so the whole amount earns interest from the start to maturity. An installment savings account is paid in monthly, which means each contribution earns interest for a different length of time.

Money paid in January earns twelve months of interest; money paid in December earns one. The second month earns eleven, the third ten. Adding twelve months down to one gives 78 months, and dividing that by 12 gives 6.5 months as the average holding period.

Pre-tax interest is calculated as the monthly contribution × the annual rate × 6.5. Not × 12. Interest income tax of 15.4% is then deducted from that, and the remainder reaches the account.

Lengthening the term does not change the structure. Six months averages 3.5 months, twenty-four months averages 12.5. In every case it comes to a little over half the contribution period.

KRW 300,000 a Month for a Year, the Actual Interest

This is KRW 300,000 a month for 12 months, KRW 3.6 million in total, at 3.6% per year pre-tax.

Deposit the same KRW 3.6 million at the outset and leave it for a year and the pre-tax interest is KRW 129,600. The savings account comes to 54.2% of that, and not because the rate is lower. The money went in piece by piece, so it spent less time earning interest.

Put another way, the KRW 70,200 from a savings account at 3.6% per year is the same amount as KRW 3.6 million in a time deposit at 1.95% per year for one year. Place a savings rate and a deposit rate side by side, pick the higher one, and this difference goes unnoticed.

Net of interest income tax of 15.4%, settled to the won. The rate is used to show how the calculation works and is not a disclosure for any particular product. For other amounts and terms, use the interest calculator.

What happens as the term lengthens

This is the same KRW 300,000 a month at 3.6% per year, continued. The interest grows as the total paid in grows, but compared with a lump sum of the same size the ratio drifts slightly downward.

The rightmost column compares this with the interest on the same total held as a single deposit for the same period.

Fixed and Flexible Contribution Plans

Savings accounts come in a fixed plan, which takes the same amount every month, and a flexible plan, which lets you pay what suits you within a limit. Even within one product the two plans carry different rates.

전북은행 disclosure as of July 21, 2026, pre-tax. Meeting the preferential conditions applies a higher rate, and the conditions are set out in the product terms.

On KRW 300,000 a month the pre-tax gap between the two plans is KRW 1,950. A steady income suits the fixed plan; income that varies month to month, or a large expense already scheduled, suits the flexible one. Some products include regular contributions among their preferential conditions.

0.1 percentage points against KRW 30,000 a month

Choosing a product tends to mean staring at decimal points. We calculated which does more under the same conditions: raising the rate, or raising the amount. KRW 300,000 a month for 12 months at 3.5% per year gives pre-tax interest of KRW 68,250.

• Raise the rate by 0.1 percentage points to 3.6% and it becomes KRW 70,200, an increase of KRW 1,950.
• Leave the rate alone and raise the monthly contribution by KRW 30,000 to KRW 330,000 and it becomes KRW 75,075, an increase of KRW 6,825.

None of this means looking for a better rate is pointless. It does mean that raising the monthly amount by KRW 30,000 adds more than three times as much interest as hunting down a product with demanding conditions.

Products That Add a Preferential Rate by Draw

Some savings accounts add the result of a draw on top of the base rate. The maximum rate attached to these products is a rate you receive only if you win.

• JB슈퍼씨드적금 — base rate 3.5% per year, up to 13.5% per year if drawn (pre-tax, as of July 21, 2026). Contributing on time each month gives 11 entries in total; winning adds 10 percentage points, and not winning leaves the base rate.

At the base rate of 3.5% per year, KRW 300,000 a month for 12 months gives KRW 68,250 pre-tax and KRW 57,739 after tax. Comparing this with other savings accounts means setting it against that KRW 57,739, not against 13.5%.

The product terms are at 전북은행 JB슈퍼씨드적금 and JB 다이렉트적금 fixed plan.

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