The grounded electrical-source airborne transient electromagnetic (GREATEM) system is widely used in mineral exploration. Meanwhile, the induced polarization (IP) effect, which indicates the polarizability of the earth, is often found. In this paper, the Maxwell equations in the frequency domain are transformed into fictitious wave domain, where Maxwell equations are solved by the time domain finite difference method. Then, an integral transformation method is used to convert the calculation results back to the time domain. A three-dimensional (3D) numerical simulation in a polarizable medium is presented. The accuracy of this method is proven by comparing it with the analytical solution and the existing method, and the calculation efficiency is increased five-fold. The simulation results show that the GREATEM system has a higher response amplitude in the conductive region, while IP effects cannot be identified in the conductive area. The GREATEM system has a higher response amplitude in the low-resistance region, but IP effects cannot be identified in the low-resistance area, and the detection of IP effects is more suitable for the high-resistance area. Therefore, it is necessary to improve the detection ability of the GREATEM system in the low-resistance area.