Take ₩30 million and leave it for three years. In an ordinary account, a 3.20% Korean time deposit earns ₩2,515,279 after tax and a 3.50% parking account earns ₩2,759,260. Yet the same 3.20% deposit held inside an ISA earns ₩2,876,802 — the most of the three. The lowest headline rate wins. What decides your interest is not the rate but three things together: simple or compound accrual, tax, and when you need the money back. The calculator below takes all three at once.
1. What comes out. On ₩30M over three years: an ordinary 3.20% deposit earns ₩2,515,279 after tax, a 3.50% parking account ₩2,759,260, and the same 3.20% deposit inside an ISA ₩2,876,802 — the lowest headline rate wins.
2. What gets missed. What decides your interest is not the rate but three things together: simple or compound accrual, tax, and when you need the money back. An ISA is worth about 0.44pp of extra rate, and conversely “when will you need it” decides where it goes, because locking it up has a price.
3. How to use it. Enter principal, rate, term and contributions and it compares simple against compound, after tax. Note that the “₩40 million super ISA” does not exist as of July 2026.
| Point | Balance (pre-tax) |
|---|
Results update as you type, and the accrual method you did not pick is calculated too and compared in the box above, along with the point at which the starting amount doubles. Figures assume the rate holds for the whole term and are estimates; fees and inflation are not modelled. This is not investment advice.
The run shown here — ₩30M, 3.20%, 3 years
The defaults reflect July 2026 conditions in Korea. 3.20% is the one-year time deposit rate at the five major banks after this month's increases, and three years matches the ISA holding requirement used for comparison further down.
Where do simple and compound separate
Simple interest accrues on the original amount only; compound interest accrues on the interest as well. At Korean deposit rates the two are nearly indistinguishable for years. On ₩10 million at 3.20%:
| Term | Simple | Monthly compound | Gap | Ratio |
|---|---|---|---|---|
| 1 year | ₩320,000 | ₩324,735 | ₩4,735 | 1.015× |
| 3 years | ₩960,000 | ₩1,006,184 | ₩46,184 | 1.048× |
| 5 years | ₩1,600,000 | ₩1,732,610 | ₩132,610 | 1.083× |
| 10 years | ₩3,200,000 | ₩3,765,414 | ₩565,414 | 1.177× |
| 20 years | ₩6,400,000 | ₩8,948,661 | ₩2,548,661 | 1.398× |
| 30 years | ₩9,600,000 | ₩16,083,616 | ₩6,483,616 | 1.675× |
One year separates them by ₩4,735 — the price of a coffee, not a reason to choose a product. Compounding starts to matter around the ten-year mark. Korean time deposits and instalment savings run one to three years, so in practice the compounding window rarely opens. When a Korean deposit product mentions compounding, it usually describes repeated rollovers rather than a property of the product itself.
Raise the rate and the picture changes. The same ₩10 million at 7% earns ₩14 million simple over twenty years against ₩30.39 million compounded — ₩16.39 million apart. Compounding needs both a high rate and a long horizon.
Stretch the six rows of the table across the full thirty years and it becomes clear how long compounding takes to pull away. The two lines sit almost on top of each other until year ten.
When does the amount double
The usual shortcut is 72 ÷ rate. Korea's Financial Supervisory Service presents it on its e-Financial Education Centre as “an easy way to find when compounding doubles the principal”. It is an approximation, and it drifts:
| Annual rate | Rule of 72 | Actual (monthly compound) | Error | Typical product |
|---|---|---|---|---|
| 2.00% | 36.0 yrs | 34.69 yrs | +1.31 yrs | MMF / CMA |
| 3.20% | 22.5 yrs | 21.69 yrs | +0.81 yrs | Major bank deposit |
| 3.50% | 20.6 yrs | 19.83 yrs | +0.74 yrs | Savings bank parking account |
| 3.91% | 18.4 yrs | 17.76 yrs | +0.66 yrs | Savings bank deposit average |
| 7.00% | 10.3 yrs | 9.93 yrs | +0.35 yrs | Long-run investment assumption |
The lower the rate, the more the rule overstates the time. Korea's KDI uses a rule of 70 instead, which tracks better at low rates. More importantly, both are pre-tax. Apply the 15.4% withholding and a 3.20% deposit takes not 21.69 but over 25 years to double.
The rule of 72 is an approximation, and it always runs long. The lower the rate, the wider it misses.
The formulas, and where they come from
P is the principal, r the annual rate (decimal), n the compounding periods per year and t the term in years.
- Simple — P × (1 + r × t); each period's interest is a constant P × r.
- Compound — P × (1 + r ÷ n)n × t. This calculator multiplies the balance by (1 + r ÷ n)n ÷ 12 each month.
- After tax — principal + interest × (1 − tax rate). Tax applies to interest only.
The definitions and the rule of 72 follow the FSS material above. Results can be cross-checked against the Korea Federation of Savings Banks' deposit calculator, which offers both simple and compound modes. No public agency page publishes the compound formula itself, so the expressions above are derived from those definitions.
Decide when you need it first
Starting from the rate usually gets it wrong. Start from when you will take the money out; that narrows the field to three or four options, and only then compare rates. On ₩10 million held for one year:
| Where | Access | July 2026 rate | After-tax interest on ₩10M | Principal protection |
|---|---|---|---|---|
| Ordinary current account | Instant | around 0.1% | ₩8,460 | Insured to ₩100M |
| Internet bank parking account | Instant | 1.0–1.7% | ₩84,600–143,820 | Insured to ₩100M |
| Savings bank parking account | Instant | 3.0–3.5% (tiered) | ₩296,100 at 3.5% | Insured to ₩100M |
| CMA (note / RP type) | Same day | 2.05–2.35% | ₩198,810 at 2.35% | Not insured |
| MMF | T+1 | around 2.4% | ₩199,656 | Not insured, variable |
| Time deposit (major banks) | 1-year maturity | 3.20–3.25% | ₩270,720 | Insured to ₩100M |
| Time deposit (savings banks) | 1-year maturity | 3.91% average | ₩330,786 | Insured to ₩100M |
The striking line is that CMA and MMF now pay less than a parking account while carrying no deposit insurance. All four CMA types offered by Korean brokerages — note, RP, MMF and MMW — sit outside the deposit protection scheme. Note and RP types pay a contracted return, so the principal only moves if the brokerage fails; MMF and MMW types are performance-based and the principal can fall. CMAs once clearly beat bank current accounts, but with savings bank parking accounts above 3% that advantage has largely gone.
This is where an emergency fund belongs. On monthly living costs of ₩2.5 million, three months is ₩7.5 million and six months ₩15 million — three months for salaried workers, six for freelancers and the self-employed. This money is judged on being available immediately and without loss, not on return, so a parking account is the answer and deposits, ISAs and investments are not candidates. ₩15 million in a 3.50% parking account earns ₩444,150 after tax a year — more than ₩430,000 above leaving it in a current account.
What is locking it up worth
At savings banks, parking accounts pay 3.50% and one-year deposits 3.91%. That 0.41pp is the price of committing for a year: on ₩10 million, ₩34,686 after tax, or ₩2,890 a month. Less than most people assume.
Breaking a deposit early costs much more. Terminate before maturity and the early-termination rate applies — typically around 0.5%:
| Scenario | Deposit at 3.91% | Parking at 3.50% | Difference |
|---|---|---|---|
| Held to maturity (12 months) | ₩330,786 | ₩296,100 | Deposit +₩34,686 |
| Withdrawn at 9 months | ₩31,725 (early rate) | ₩222,075 | Parking +₩190,350 |
| Withdrawn at 6 months | ₩21,150 (early rate) | ₩148,050 | Parking +₩126,900 |
| Withdrawn at 3 months | ₩10,575 (early rate) | ₩74,025 | Parking +₩63,450 |
Setting the two expected values equal, a parking account wins once the chance of needing the money mid-term exceeds about 21.5%. The payoff is asymmetric: ₩34,686 to gain against ₩126,900 to lose. Early-termination rates vary by bank and product, so check the terms before signing.
How much is an ISA worth
This is where the headline rates invert. A Korean ISA (Individual Savings Account) exempts the first ₩2 million of net gains in the account (₩4 million on the lower-income variant) and taxes the rest at 9.9% instead of 15.4%. Less tax means more left, at the same rate.
On ₩30 million at 3.20% for three years:
| Where it sits | Headline rate | After-tax interest, 3 yrs | Ordinary-account equivalent |
|---|---|---|---|
| Ordinary account, time deposit | 3.20% | ₩2,515,279 | 3.200% (baseline) |
| Ordinary account, parking | 3.50% | ₩2,759,260 | 3.500% |
| ISA, standard type | 3.20% | ₩2,876,802 | 3.644% (+0.44pp) |
| ISA, lower-income type | 3.20% | ₩2,973,143 | 3.762% (+0.56pp) |
| Ordinary account, savings bank deposit | 3.91% | ₩3,094,995 | 3.910% |
Simply holding the deposit inside an ISA is worth 0.44pp of extra rate, or 0.56pp on the lower-income type (prior-year gross pay of ₩50 million or less, or business income of ₩38 million or less). But note the last row: a 3.91% savings bank deposit still beats a 3.20% deposit inside an ISA by ₩218,193. An ISA is not a product — it is a wrapper that saves you the tax. What goes inside still matters more.
Two things about ISAs that are easy to miss:
- The ₩2 million exemption is cumulative to maturity, not annual. At 3.20% you need roughly ₩20.18 million to generate ₩2 million of interest over three years. Below that, your tax inside the ISA is zero for the whole term.
- Loss offsetting is arguably the bigger benefit. With +₩3 million on one holding and −₩1 million on another, an ordinary account taxes the ₩3 million gain and takes ₩462,000. An ISA looks at the ₩2 million net, which falls inside the exemption — zero tax. Irrelevant if you only hold deposits; central if you hold several things.
The holding requirement is three years. Close the account earlier and the tax benefit is clawed back. If you need cash, use a partial withdrawal rather than closing — you can take out up to the amount you paid in while keeping the benefit (in practice 90% of principal on trust-type accounts, 80–95% on discretionary). Gains cannot be withdrawn. Which is why ISA money and emergency money must be kept separate.
Does the “super ISA” exist yet
Search for Korean ISA limits and the top results describe a “2026 super ISA” at ₩40 million a year, ₩200 million total, ₩10 million tax-free. Checked against the source, that was never enacted. The sequence:
- January 2024 — the Ministry of Economy and Finance announced a plan to raise the annual limit from ₩20 million to ₩40 million, the total from ₩100 million to ₩200 million, and the exemption from ₩2 million to ₩5 million, plus a new domestic-investment ISA. The KDI record of that announcement marks it as a proposal.
- December 2024 — dropped during National Assembly review. The existing limits stayed.
- January 2026 — a growth strategy announced new “national growth” and “youth” ISA variants, but without published limits and pending legislation.
The place to check is the FSS ISA page on Financial Products at a Glance. As of July 2026 it still reads “₩20 million a year (up to ₩100 million over five years)”, “first ₩2 million of financial income exempt, the excess taxed separately at 9%”, and “excluded if subject to comprehensive taxation on financial income in any of the previous three tax years”. That last clause being unchanged also means the domestic-investment ISA has not launched either. When you see a claim that the limits went up, open that page first.
Which one, for whom
- You do not know when you will need it → parking account. Three to six months of living costs belong here. This money is not judged on return.
- You definitely will not touch it for a year → time deposit. But if the chance of an early withdrawal is even 21.5%, the parking account wins on expected value.
- You can commit three years and already have an emergency fund → ISA. Worth 0.44pp on identical products, and more if you hold several things.
- Your gross pay is ₩50 million or less → check eligibility for the lower-income ISA first. Double the exemption, 0.56pp of effect. The income certificate is free from Hometax or Gov24.
- You are shopping for a compound product → look at the term first. Over three years compounding is worth ₩46,184 on ₩10 million, which cannot decide a product. It only matters on money you will hold ten years or more.
- You hold a CMA → compare its current rate against a savings bank parking account. In July 2026 the parking account pays over a point more and is insured.
When this does not hold
- Tiered rates — parking accounts often pay “3.5% up to ₩100M, 3.0% from ₩100M to ₩1bn”, and products advertising “up to 7%” usually apply that only to the first ₩500,000–2,000,000. The table rates hold only within the relevant tier.
- Bonus conditions — miss the salary-transfer or card-spending requirement and you drop to the base rate.
- Variable rates — parking accounts, CMAs and MMFs reprice constantly. The calculator holds the rate flat.
- Performance-based products — MMFs and MMW-type CMAs pay results, not a contracted rate. The figures above are recent returns, not promises.
- What sits inside the ISA — the calculation assumes deposits. Domestic equities and ETFs are taxed differently.
- Financial income above ₩20 million — comprehensive taxation applies and the effective rate can exceed 15.4%. ISA amounts taxed separately are not aggregated.
- Inflation — every figure here is nominal.
Questions that remain
I'm looking for a compound product. Does compounding matter on a deposit?
It depends on the term. On ₩10 million at 3.20%, simple and monthly-compound differ by ₩4,735 over one year — not a basis for choosing a product. Three years is ₩46,184; it starts to matter around ten years, and at thirty it reaches 1.675×. But Korean time deposits and instalment accounts mature in one to three years, so the window where compounding pays barely exists. If you see “compound” on a deposit, it is usually the result of repeatedly rolling over at maturity rather than a property of the product.
Is the rule of 72 accurate?
It always runs a little long. Checked against monthly compounding it is out by 1.31 years at 2% and 0.35 years at 7% — the lower the rate, the less the shortcut can be trusted. Korea's KDI uses a rule of 70 instead, which tracks better at low rates. More important: both are pre-tax. Apply the 15.4% withholding and a 3.20% deposit takes not 21.69 years to double but more than 25.
Shouldn't I just start from the highest rate?
The order runs the other way. Once when you will need the money is settled, the shortlist drops to three or four and you compare rates inside it. Look at it that way and one thing stands out: CMAs and MMFs pay less than a parking account and carry no depositor protection. None of a brokerage CMA's forms — RP, issued-note, MMF or MMW — is covered, and the MMF and MMW forms are performance-based, so principal can fall. With savings-bank parking accounts now above 3%, the old case for a CMA has largely gone.
Is locking money up for a year worth it?
Look at the asymmetry. At savings banks, the 0.41pp between a 3.50% parking account and a 3.91% one-year deposit is worth ₩34,686 after tax on ₩10 million — ₩2,890 a month. But breaking it at nine months costs you ₩190,350, because the early-termination rate drops to somewhere near 0.5%. Given how lopsided that is, on expected value a parking account wins once the chance of needing the money mid-term exceeds about 21.5%.
Hasn't the “super ISA” arrived?
It has not been enacted. In January 2024 the Ministry of Economy and Finance proposed raising the cap to ₩40 million a year and ₩200 million in total, lifting the tax-free allowance to ₩5 million and adding a domestic-investment type — but it was dropped in the National Assembly in December 2024. A January 2026 growth strategy named a “national growth ISA” and a “youth ISA”, but no figures were published and both need legislation. The place to check is the FSS “Financial Products at a Glance” ISA page, which as of July 2026 still reads “₩20 million a year (up to ₩100 million over five years)”, “tax-free on up to ₩2 million of financial income” and “excludes those subject to comprehensive financial income taxation” — that last line still standing is what tells you the domestic-investment type has not launched either.
Where to check further
- The rates actually on sale right now. The 3.20% and 3.50% here are illustrative — take current headline and best rates from the Korea Federation of Banks consumer portal and put those in.
- Whether you qualify for the ISA lower-income band. The tax-free ceiling splits at ₩4M and ₩2M on an income test — the provider you open with confirms it from your income records. The scheme itself is in our ISA guide.
- What happens to interest and tax relief on early termination. It varies by product and account type, so it is not in this calculation — read the early-termination rate in the product disclosure before signing.
Sources and where to verify
- Financial Supervisory Service, e-Financial Education Centre — simple and compound interest, and the rule of 72
- Financial Supervisory Service — ISA guidance (current limits, exemption and eligibility)
- Financial Supervisory Service — demand deposit guidance · time deposit comparison
- Korea Federation of Savings Banks — deposit calculator (simple and compound modes, 15.4% withholding)
- Korea Financial Investment Association — MMF subscription and redemption (next-business-day pricing and settlement)
- KDI Economic Information and Education Center — the rule of 70 · the 2024 ISA expansion proposal
For the accumulation stage, see the deposit and savings maturity calculator; if you also carry debt, put those rates next to the loan interest calculator. Product-level taxation is covered in the guide to ETF taxation in Korea, and the extra deduction for rolling ISA proceeds into a pension account in pension savings and IRP tax credits. The case for moving beyond deposits is in what compounding looks like over twenty years, and the rest of the tools are in the calculator hub.
Rates and rules age fastest here. Deposit and parking rates are from July 2026 postings, CMA and MMF figures from the same month's provider disclosures, and ISA rules are as of July 2026. Parking and CMA rates move constantly, so re-check immediately before you commit. The structural gap between simple and compound accrual — ₩46,184 over three years on ₩10 million at 3.20%, ₩6.48 million over thirty — holds its shape as rates move. Written as of July 2026.
