Saving Money with Installment Savings and Deposits, and When to Send Money Home

Installment savings, deposits and parking accounts: the differences

Type	How it works	When to use it
적금 (installment savings)	You put in a fixed amount every month. At the end of the period, you get your money back plus interest	When you save part of your salary every month
예금 (fixed deposit)	You put in a large amount one time. After a fixed period, you get interest	When you want to grow money you already saved
파킹통장 (parking account, withdraw anytime)	You can put money in and take it out at any time. The interest rate is usually low	Money you will send soon, emergency money

• Interest rates are shown as a yearly rate. Installment savings at 4% a year and a deposit at 4% a year do not give you the same interest. In installment savings, each monthly payment gets interest only for the time it stayed in the bank.
• The rate in advertisements is before tax. The money you actually receive is the amount after 15.4% tax is taken out.
• You can compare rates for each product on 금융상품 한눈에 (finlife.fss.or.kr), a website of 금융감독원 (Financial Supervisory Service). We do not recommend any bank. Check the conditions yourself and choose.

Conditions and what to bring

• 외국인등록증 (or passport)
• Depending on the bank: 근로계약서 (employment contract), 재직증명서 (certificate of employment), 급여명세서 (pay slip)
• If you already have an account at a bank, you can often open savings at that bank right away.
• If you do not have much time left on your stay permit, some banks ask you to set the end date (maturity) within your stay period. Each bank has different rules, so ask before you sign up.
• Whether you can sign up in the mobile app is also different at each bank. You may need to visit a branch.

If you have not opened a bank account yet, read the article on opening a bank account first.

Interest and tax

• On interest income, there is income tax of 14% and local income tax of 1.4%. The total is 15.4%.
• The bank takes this out automatically when it pays interest and puts only the rest into your account. Usually you do not need to report anything.
• If your interest and dividend income in one year is more than 20,000,000 원, it is added to your other income for tax (comprehensive taxation). Most workers are not in this group.
• From January 1, 2026, 비과세종합저축 (tax-free savings) is only for people such as those aged 65 or older who can receive the basic pension, people with disabilities, and independence patriots. Foreigners can join if they meet these conditions, but most people working on E-9 do not. To check if you qualify, ask the bank or 국세청 (National Tax Service) at 126.

Steps to save a large amount

1. Check the day your salary comes in.
2. Keep separate accounts for your salary and for your savings.
3. Set up an automatic transfer to installment savings on the day after payday. Take savings out first, or nothing will be left.
4. Send money home on a fixed day, only a fixed amount. The same day every month is good.
5. Live on the money that is left.
6. Keep emergency money in a parking account, enough for hospital bills and a plane ticket home.

If you decide in advance how much to send to your family, you will not have to change it every month. If someone suddenly asks you for a large amount, do not send it right away. Think about it for one day.

Basics of when to send money

• The real cost is fee + exchange rate difference (spread). Even if the fee is 0 원, you lose money if the exchange rate is bad.
• Comparing is simple. On the same day, with the same amount, try two or three services and compare how much the receiver will actually get.
• No one can predict exchange rates. Do not send everything at once. If you send in parts every month, you get close to the average rate.
• Money that is not urgent can stay in Korean won installment savings and be sent later. But the exchange rate may move against you during that time.
• Remittance fees change by amount range. Sending small amounts many times can cost more in fees, so do the math once.
• Detailed comparison points are in the article comparing ways to send money.

Before you leave Korea

• If you cancel installment savings early, you do not get the promised interest. Set the end date before your planned departure date.
• Order before leaving: close installment savings and deposits → send the remaining balance → cancel automatic transfers and automatic payments → close your accounts
• Do not leave your bankbook or card in Korea with another person. If it is used as a 대포통장 (an account used by criminals under someone else's name), you can be punished. Giving away your bankbook, card or password can lead to up to 5 years in prison or a fine of up to 30,000,000 원.
• 퇴직금 (severance pay) and 출국만기보험 (departure guarantee insurance) are separate from your savings. Check those articles separately.

Never do these

• Do not give cash to a friend or your boss to keep. Without proof, it is very hard to get it back. Keep your money in an account in your own name.
• Do not accept offers that say "your money is guaranteed and you get high interest every month." Collecting money like this without permission is illegal fund-raising (유사수신행위). It can lead to up to 5 years in prison or a fine of up to 50,000,000 원. Even when people are punished, most of the money does not come back.
• Say no to coin or foreign futures "reading rooms" and investment offers in group chats, even if someone from your own country recommends them.
• 계 (private savings club) and 곗돈 (club money) are not protected by law. If someone runs away with the money, it is hard to get it back.
• Never lend your bank account or your name to anyone, for any reason.
• If you suspect fraud: report to 금융감독원 at 1332 or the police at 112.

Frequently asked questions

Q. Are foreigners also covered by deposit protection? A. Yes. No matter your nationality, you are protected up to 100,000,000 원 per person (money + interest) at each financial company. Foreign currency deposits are included.

Q. What if I keep money at two banks? A. Each financial company protects up to 100,000,000 원 separately. Several accounts at one bank are added together.

Q. Are funds or coins protected? A. No. Products whose value changes with investment results are not protected.

Q. What if I suddenly have to leave Korea before my installment savings end? A. You only get the early-cancellation interest. Explain your situation to the bank and close the account and send the money at the same time.

Q. Can I get the 15.4% tax back? A. In principle, interest income tax ends when it is taken out at payment. To check if a different rate applies under a tax treaty with your home country, ask 국세청 at 126.

Where to get help

• 금융감독원 Financial Consumer Information Portal FINE fine.fss.or.kr (check registered companies)
• 금융감독원 금융상품 한눈에 finlife.fss.or.kr (compare deposit and installment savings rates)
• 금융감독원 1332 (financial advice, fraud reports)
• 국세청 Semirae Call Center 126 (tax advice)
• 예금보험공사 (Korea Deposit Insurance Corporation) kdic.or.kr (check what is protected)