Deposit and installment structures
A term deposit keeps the initial principal invested for the agreed period. Under simple interest, the core relationship is principal × annual rate × term.
With installment savings, the first payment earns interest the longest and the last payment the shortest. Applying the annual rate to every contribution for the full term would overstate interest.
- Deposit: one principal with one investment period
- Installment savings: a different period for every payment
- Bonus rate: confirm whether you meet every condition
Before-tax and after-tax amounts
Before-tax interest is the amount before withholding. After-tax interest subtracts the tax rate entered by the user.
Tax-free or preferential treatment depends on the product and account holder. Match the calculator's tax setting to the product terms; Baro Tool does not determine tax eligibility.
Example: 500,000 won monthly for 12 months
Twelve payments produce 6 million won in principal. Even at 4% simple interest, the interest is below 240,000 won because the full 6 million is not invested for the entire year.
Payment timing, exact day counts, and bank rounding can create a small difference from the final maturity amount.
- Principal = monthly payment × number of payments
- After-tax interest = before-tax interest × (1 - tax rate)
- Maturity amount = principal + after-tax interest
Compare products on the same basis
Use the same payment, date, term, and tax rate. A high maximum rate may require salary deposits, card spending, or other conditions that lower the rate if unmet.
Early-withdrawal and post-maturity rates differ from the headline rate. Review those rules if you may not keep the product to maturity.
Understand interest contribution by contribution
In a monthly savings plan, the first payment may earn for twelve months, the second for eleven, and so on. Multiplying each contribution by the annual rate and its months divided by twelve, then adding the results, gives a useful simple-interest estimate.
For 500,000 won monthly over twelve months at 4%, add earning periods from twelve months down to one. The bank's actual payment dates, maturity date, and day-count method can differ, so use this to understand the structure rather than replace the final statement.
- Contribution interest ≈ payment × annual rate × months ÷ 12
- Before-tax interest ≈ sum of all contribution interest
- Apply the relevant tax rate for an after-tax estimate
Turn a headline bonus rate into a realistic rate
If a promoted 6% rate combines a 3% base with 3% in conditions, enter 6% only when you can meet every condition. Separate payroll deposit, card spending, new-customer, and marketing-consent requirements.
Lottery bonuses or rates that apply to only part of the balance are not the same as a guaranteed rate on every contribution. Calculate both a base-rate and bonus-rate scenario when eligibility is uncertain.
Check early withdrawal and maturity treatment
Early withdrawal commonly uses a separate rate based on the elapsed period, not the advertised maturity rate. If you may need the cash, check the product schedule at the likely withdrawal date.
Automatic renewal and post-maturity rates also vary. Add deposit protection, missed-payment effects on bonus rates, and withdrawal conditions to the comparison rather than relying on the estimated maturity amount alone.
- Separate guaranteed base rate from conditional bonuses
- Choose the tax setting that actually applies
- Use the provider's disclosure and account screen for the final amount