2026 Savings Account vs Time Deposit vs CMA — Short-Term Fund Yield Comparison

|---------|------|-----------|
| Toss Bank "Grow It" Savings | Up to 5.0% p.a. | With preferential conditions |
| K Bank Code-K Flexible Savings | 3.8% p.a. | Base rate |
| KakaoBank 26-Week Savings | 4.2% p.a. | Auto-increasing weekly amounts |
| Major bank regular savings | 2.5–3.2% p.a. | Base rate | --- ## Time Deposit — Certainty of Fixed Rates ### Net Return Calculation ```
KRW 10,000,000 × 12 months × 3.5% p.a.:
Pre-tax interest: KRW 350,000
Withholding tax (15.4%): -KRW 53,900
Net interest: KRW 296,100
Effective yield: 2.96%

|--------------|-------------------|----------------|-----------|
| < 1 month | Parking account (3.5%) | ~KRW 23,800 | ★★★★★ |
| 1–3 months | Issuance note CMA (3.9%) | ~KRW 82,600 | ★★★★☆ |
| 3–6 months | Savings bank time deposit (3.8%) | ~KRW 160,700 | ★★★☆☆ |
| 6–12 months | Time deposit (3.5%) | ~KRW 296,100 | ★★☆☆☆ |
| 12 months | Savings + deposit split (3.8–4.0%) | ~KRW 160,200 | ★★☆☆☆ | --- ## FAQ **Q1. How much interest do I lose if I withdraw an installment savings account early?** A. Most accounts apply an early-withdrawal rate equal to 10–30% of the contracted rate. For example, withdrawing from a 4.0% savings account after 6 months may leave you with only 0.5–1.0% effective interest. If the money is for the short term, a parking account or CMA is usually the better fit. **Q2. Are issuance-note CMAs excluded from deposit protection?** A. Yes. Securities firm issuance notes are not covered by the Deposit Protection Act. You receive principal and interest as long as the issuing firm remains solvent, so choosing a large, established securities firm can reduce practical risk. **Q3. Does the 15.4% withholding tax always apply?** A. Yes, for standard accounts. If your total annual financial income exceeds KRW 20M, you become subject to comprehensive financial income taxation, with a marginal rate of up to 49.5% (top bracket + local tax). **Q4. Parking account or RP-type CMA — which is better?** A. Issuance-note CMAs generally offer higher rates but lack deposit protection. Parking accounts are simpler and deposit-protected up to KRW 50M. For amounts under KRW 100M, parking accounts are often ideal; above that, spreading funds across products is prudent. **Q5. Is an MMF a safe investment?** A. MMFs invest in short-term bonds and do not guarantee principal. Historical losses are extremely rare, but short-term price dips can happen during market stress. MMFs carry slightly more risk than RP-type CMAs or parking accounts. **Q6. Why do savings banks offer higher rates than major banks?** A. Savings banks have higher funding costs and need to attract deposits with better rates. Deposit protection applies equally up to KRW 50M, so staying within that limit can be a low-risk way to earn more. **Q7. Is there a strategy that combines installment savings accounts and time deposits?** A. Yes. A common "three-way split" puts, for example, KRW 10M each into a savings account for discipline, a parking account for emergency cash, and a time deposit for locked-in yield. Adjust the ratios based on your cash flow needs. **Q8. Can tax-exempt comprehensive savings accounts reduce my tax bill?** A. Yes. Individuals aged 65+ and other qualifying groups (disabled persons, low-income holders) can open a tax-exempt comprehensive savings account up to KRW 50M and pay zero withholding tax on interest. If you qualify, it is worth using.