Calculate maturity amount and interest for monthly installment savings.
Interest is calculated on a monthly basis (annual rate ÷ 12).
6,000,000
130,000
6,130,000
Calculates maturity amount and interest for monthly savings.
Enter monthly payment, term in months, and annual rate; choose simple or compound interest to get total interest and maturity amount.
Paying 100 a month into a 4% account for a year feels like it should earn 4% of 1,200. It earns about half that, and the reason is structural rather than a trick.
With a regular savings plan you add money every month. The first payment earns interest for all twelve months; the last one earns interest for a single month.
So the return is not the full balance multiplied by the rate. Adding up the months each payment is held gives 12 + 11 + … + 1 = 78 month-payments, roughly half of what you would get if the whole sum sat there from day one.
For a fixed monthly amount with simple interest:
Interest = monthly amount × (annual rate ÷ 12) × (n × (n+1) ÷ 2)
At 100 a month for 12 months at 4%: 100 × 0.003333 × 78 = 26. The n(n+1)/2 term is the total number of months of interest earned across all the payments.
If you already have the full amount, a fixed deposit beats a regular savings plan at the same headline rate. The whole balance earns interest from the start, giving 48 instead of 26 on the same 1,200 — about 1.8 times as much.
Regular savings plans exist for building a balance you do not yet have. Comparing headline rates between the two products is misleading because the structures differ.
Most countries tax savings interest, and the mechanism varies: some withhold at source, others expect you to declare it. Korea withholds 15.4%, Japan 20.315%, while in the US interest is ordinary income reported on Form 1099-INT and taxed at your marginal rate.
Some jurisdictions offer tax-free allowances or wrappers, such as the UK's personal savings allowance and ISAs. Headline rates are always quoted before tax, so the amount you keep is lower.
Closing an account before maturity usually replaces the agreed rate with a much lower early-termination rate, wiping out most of the interest earned.
Advertised rates are also often the maximum available only if you meet conditions — salary deposits, card spending, direct debits. Miss those and the base rate applies. Check which figure you actually qualify for before opening the account.
| Item | Amount |
|---|---|
| Total paid in | 1,200 |
| Interest before tax | 26 |
| Effective return on total paid in | About 2.2%, not 4% |
| Same amount as a lump-sum deposit | 48 before tax (about 1.8x) |
| Months of interest earned | 78 (12 + 11 + … + 1) |
