Do you also feel that the money you keep in the bank never seems to grow, or that you’re not even sure how savings interest is calculated? With so many options such as post office fixed deposit interest, bank fixed deposits, and high-interest digital savings accounts, it’s easy to feel overwhelmed. Don’t worry! This article will take you from zero to full understanding, giving you a complete comparison of fixed deposit rates across different banks and teaching you how to choose the most profitable deposit method. Let your idle cash create maximum value and stop inflation from quietly eating away at your money.
Before comparing rates across banks, let’s first understand how interest is fundamentally calculated. Many people check their account balance every day without knowing how the interest behind it is accumulated. In fact, the details matter, understanding how interest is calculated is the first step to maximizing your deposit returns.
In Taiwan, bank savings accounts generally use a “daily interest calculation with semiannual interest payment” system. It may sound complicated, but it’s quite easy to understand once broken down:
Therefore, when you see an “interest settlement” or “interest payment” record in your passbook or online banking statement, that is the total interest your deposit has generated over the past six months.
After understanding the basic concepts, we can look at the actual calculation formula. Although the bank system calculates it automatically, learning to estimate it yourself helps you plan your money more clearly.
The savings interest calculation formula is very simple:
Daily interest = Daily account balance × (annual savings interest rate ÷ 365)
For example:
Suppose Ming’s digital account has an annual savings interest rate of 1.5%, and his account balance on a certain day is NT$100,000. The interest he earns that day is:
NT$100,000 × (1.5% ÷ 365) = NT$100,000 × (0.015 ÷ 365) ≈ NT$4.1
This NT$4.1 is the interest Ming earns for the day. The bank records it and pays it out along with the accumulated interest from other days on the semiannual interest payment date. Although the amount seems small, the long-term accumulation in high-interest digital savings accounts can be quite significant.
Now that you understand how interest is calculated, the next question is the most important one: where should you put your money to earn the most? Many people think the post office is the safest option, but is that really true? Let’s conduct a full comparison of fixed deposit rates across banks to see where your money can work the hardest.
For many elders or beginners in personal finance, Chunghwa Post is synonymous with deposits and gives a strong sense of security, as if it could “never fail”. The post office’s “passbook savings” (their savings account) rates follow central bank policy adjustments and are relatively transparent. However, the price you pay for this sense of safety is lower interest rates.
Based on current market conditions, post office savings interest rates are typically far lower than those at commercial banks, not to mention compared with digital accounts. Although post office fixed deposit interest is higher than savings interest, your funds will be locked for a period (such as a one-year or two-year term), reducing flexibility. If your goal is to pursue higher interest returns, simply placing all your money in the post office may not be the most profitable choice.
Traditional banks and emerging digital-only banks or digital accounts are engaged in intense competition over deposit interest rates. To attract customers, many digital accounts have launched promotional rates far above market levels. Below is a sample 2025 comparison table to help you quickly grasp market trends:
| Bank | Account type | Promotional savings annual interest rate (%) |
Promotional balance cap |
Requirements to qualify |
| Future Bank | Digital account | Up to 3.5% | Up to NT$50,000 | New customers or completion of designated tasks |
| Rakuten Bank | Digital account | 1.5% | No cap | Requires activating PChome Pay linkage |
| Union Bank New New Bank | Digital account | Up to 2.0% | Up to NT$100,000 | New customers or completion of designated tasks |
| Taishin Bank Richart | Digital account | 1.3% | Up to NT$100,000 | Requires setting up ACH/direct deposit |
| Bank of Taiwan | Standard savings account | ~0.7% | None | None |
| Chunghwa Post | Post office passbook savings | ~0.6% | None | None |
Note: The rates in the table are illustrative examples. Please refer to each bank’s official announcements for actual rates.
From the table, it is clear that high-interest digital savings accounts have an overwhelming advantage in interest rates. For those who have short-term idle funds, do not want to lock money into fixed deposits, and still wish to earn higher interest than standard savings accounts, digital accounts are undoubtedly the best choice at the moment.
You may wonder why these digital accounts can offer such attractive rates, even exceeding many banks’ fixed deposit rates. The main reasons behind this are as follows:
Therefore, when choosing a high-interest digital savings account, you must not only look at the interest rate figure but also carefully read the rules and evaluate whether you can meet the requirements, so you can truly enjoy the benefits.
If you withdraw a fixed deposit before maturity, the interest will not be calculated using the originally agreed rate. Banks usually calculate the interest for the actual deposit period based on the posted rate and apply a “20% reduction”. For example, if you placed a one-year fixed deposit at 1.6% but break it in the 7th month, the bank will use the posted rate for “less than one year” (assume 1.2%) and then apply an 80% factor, meaning 1.2% × 0.8 = 0.96% to calculate the 7 months of interest. This is a penalty clause, so always make sure you will not need to use the funds during the period before placing a fixed deposit.
Yes, most do. High-interest savings promotions are usually short-term marketing campaigns used by banks to attract new customers. The promotional period may last six months, one year, or until a specific date. After the promotional period ends, the rate may revert to the bank’s standard posted savings rate. Therefore, as a smart depositor, you should regularly review your account’s interest rate and stay ready to “move” your funds to the next better account.
Yes. Under Taiwan’s tax laws, bank deposit interest is classified as “interest income” and must be included in individual income tax filing. However, the government provides a “special deduction for savings and investment”, giving each household (based on the tax-filing unit) an annual tax-free allowance of NT$270,000. This means that if your total interest income (including deposit interest, bond interest, etc.) stays within NT$270,000 for the year, you generally do not need to pay tax. For most young or small-budget savers, this allowance is more than sufficient.
Not necessarily. Most savings accounts in Taiwan have an “interest threshold”, usually NT$10,000. This means your end-of-day balance must exceed NT$10,000 before the bank starts calculating interest for that day. If your balance is below this level, you earn zero interest even if the funds stayed in the account the entire day. This is another detail to watch for when choosing a deposit account.
In summary, understanding how savings interest is calculated is only the first step in financial planning. The key is to allocate funds flexibly across different types of deposit accounts based on your financial goals and risk preferences. If you have idle funds that you will not need in the short term, traditional fixed deposits remain a stable option. But if you seek higher returns and greater liquidity, then after comparing bank fixed deposit rates, making good use of high-interest digital savings account promotions will undoubtedly help your assets grow more efficiently. This article provides a complete comparison of interest rates and account types to help you make the best decisions. Don’t let your financial benefits fall asleep, start reviewing your deposit strategy today.
