[Practical Finance] Ants Prefer Gold Savings Accounts... Deposits Accumulate Gold

Unique Products Including Kakao Mini Gold Bar

[Asia Economy Reporter Kangwook Cho] With soaring gold prices, 'Gold Passbook (Gold Banking),' where depositing a certain amount into a bank account leads the bank to purchase gold for investment, is gaining popularity. It is especially suitable for small investors (individual investors) who want to invest small amounts, as it allows for small quantity purchases. Instead of trading physical gold, the international gold price is converted into Korean won and credited to the passbook.

According to the financial sector on the 20th, the cumulative balance of Gold Banking accounts at three major banks?Shinhan Bank, KB Kookmin Bank, and Woori Bank?that sell Gold Banking products reached 514.8 billion KRW in the first quarter of this year, a 1.9% increase compared to the same period last year. The number of accounts is also steadily increasing. The best-performing product, Shinhan Bank's 'Gold Rush Gold Tech,' surpassed 151,314 cumulative accounts at the end of last month, an increase of 4,419 accounts compared to the same period last year. As of the 10th of this month, it exceeded 151,535 accounts, increasing by 221 accounts in just 10 days. This product is characterized by the bank recording the balance in gold information when customers deposit cash assets into the passbook. When customers want to withdraw, they receive either physical gold or the equivalent amount of money based on the gold price, drawing attention as a 'Gold Tech' investment.

Gold Banking is a product where depositing money into a gold passbook at a specific bank results in the accumulation of gold in units of 0.01 grams equivalent to the deposit amount. The gold passbook does not display amounts in dollars or Korean won but shows the weight of gold purchased according to international gold prices. Representative products include Shinhan Bank's 'Gold Rush Gold Tech,' KB Kookmin Bank's 'KB Gold Investment Passbook,' and Woori Bank's 'Woori Gold Investment.' All these products are free deposit and withdrawal accounts without restrictions on subscription eligibility, duration, or amount.

By regularly purchasing and accumulating gold when exchange rates and gold prices are low and selling when they are high, stable returns can be achieved. However, there is a 15.4% dividend income tax on capital gains, and approximately 2% fees are deducted during purchase and sale. It is also important to note that deposits are not protected by deposit insurance.

A representative from a commercial bank said, "Amid the uncertainty in financial markets caused by the COVID-19 pandemic, the price of gold, a safe asset, is expected to continue rising for the time being, increasing investor interest in Gold Tech." They advised, "Gold passbooks are simpler than other Gold Tech options, but since returns depend on exchange rates and gold prices, they are high-risk investment products, so it is advisable to invest with this in mind."

[Image source=Yonhap News]

In addition to Gold Banking, there are unique products that small investors can easily invest in. The Korea Post announced last month that it is selling 'Post Office Mini Gold Bars (Kakao Friends)' designed with Kakao Friends characters Ryan and Apeach through the Internet Post Office. The basic weights are half don (1.88g), one don (3.75g), and two don (7.5g), with a total of 12 types released in two varieties per character.

Investment is also possible through card company apps. BC Card recently launched the 'KRX Gold Easy Investment Service' through its application 'Paybook.' Through this service, customers can order the 'Gold 99.99K' item sold by Shinhan Financial Investment, and regular investments that automatically purchase a fixed amount of gold monthly like a savings plan are also available. BC Card plans to provide an investment support fund of 30,000 KRW to a total of 1,000 customers who order and hold at least 1g of gold through Paybook by the 29th, via a lottery, depositing the funds into Shinhan Financial Investment CMA accounts opened through Paybook.

This content was produced with the assistance of AI translation services.