[Wondara's Small but Certain Finance] How to Use Dormant Cheongyak Savings Accounts... Interest Rates Are 'Identical' Across Banks

Interest Rates Are the Same Across Banks... Get 1.5% More Interest When Switching to 'Cheongnyeon Wudae Cheongyak Tongjang'
With Growing Youth Interest in Financial Management, 'Gift a Cheongyak Tongjang' Also Available... Age 17 Is the Most Reasonable to Join
If You Move, 'Region Change' Is Required... For Income Deduction, Obtain 'Mujutaek Hwaginseo' from the Bank

As the saying goes, "If the company atmosphere worsens, open your stock window," these days, when it's hard to join conversations without interest in financial investment, we plan to deliver basic financial investment tips every weekend for those who are '재테크 알못' (financial investment novices) who feel shy to ask questions. We will resolve the curiosities of Mr. Kim Jjomjjom, who wants to start 'Jjomjjomdari' (a new term meaning 'little by little' or 'small') financial investment, through 'Wondara's Simple but Certain Financial Investment.'

[Asia Economy Reporter Wondara] Mr. Kim Jjomjjom was checking his bank accounts and discovered a housing subscription savings account he had opened long ago. The last deposit was made three years ago, and he found that the account was set for a small provincial city, not Seoul where he currently lives. Planning to close the subscription account, Mr. Jjomjjom searched online and found that 'changing the region is possible,' so he visited the bank.

▲Is it possible to change the region?

Some people think they must close and reopen the account when they move, but doing so may cause disadvantages in the number of payments made. You can change the region by using the 'Chungyak Home' website or by bringing a resident registration certificate showing the updated address to the bank.

Especially, only one housing subscription account per person is allowed, and recently, it is said that you need a subscription account with a 'perfect score' to have a chance of winning in the subscription market. The perfect score requires conditions such as over 15 years of no home ownership (32 points), more than 6 dependents (35 points), and over 15 years of subscription account membership (17 points). Therefore, if you move or want to change the subscription region, it is much more advantageous to change the region.

▲I heard older accounts are better?is that true?

Simply having an older account does not increase your ranking. You must meet the number of payments and amount criteria. For speculative overheated zones and regulated areas, you must have at least 2 years of membership and 24 payments; for the metropolitan area, 1 year and 12 payments; and for areas outside the metropolitan area, 6 years and 6 payments. Therefore, even if Mr. Jjomjjom’s account is over 3 years old, if he has not met the payment count, he does not qualify for first priority. However, for private sales, if 24 months have passed since joining and the deposit amount by area is met, you qualify for first priority. To add, the deposit amounts required for all areas in private sales are 15 million KRW, 10 million KRW for other metropolitan cities, and 5 million KRW for city/county areas.

To receive income tax deduction, you must submit a 'No Home Ownership Certificate' to the bank... Benefits up to 960,000 KRW

▲I heard you can get housing subscription benefits through income tax deduction. How can I receive it?

First, if you have a housing subscription savings account, you can get an income tax deduction of up to 40% of the amount paid. Within a limit of 2.4 million KRW, you can get a deduction benefit of up to 960,000 KRW. However, to receive a 'payment certificate,' you must first submit a 'No Home Ownership Certificate' and a resident registration certificate to the bank. To obtain the No Home Ownership Certificate, you need to register on the housing subscription bank’s website under Income Tax Deduction Target/Registration Cancellation > Housing Subscription Savings > Check Income Tax Deduction Eligibility. Then, apply for the year-end tax settlement certificate issuance on the bank’s website, print the payment certificate, and attach it when submitting income tax deduction documents.

▲Are there banks that offer higher interest rates? Which bank should I go to if I want to open a new account?

Housing subscription savings accounts can be opened at most first-tier banks. However, the interest rates are all the same. When the subscription account was launched in 2009, the interest rates on savings accounts at commercial banks were around 3-4%, so the subscription account was popular as a high-interest product. Currently, the interest rates are 1% per annum for deposits over 1 month and less than 1 year, 1.5% for 1 year to less than 2 years, and 1.8% for over 2 years, identical across banks.

There is one way to get a higher interest rate: for youth aged 34 or younger, if they open or convert to a Youth Preferential Housing Subscription Account, they receive an additional 1.5% interest on top of the existing rate. Interest income up to 5 million KRW during this period is also tax-exempt. Although the rates are the same across banks, some banks offer preferential interest rates or events when using products like overdraft accounts or loans linked to the housing subscription account, so it is advisable to carefully compare before joining.

▲I heard you can also 'gift' a subscription account.

With growing interest in youth financial investment, banks nowadays offer a 'subscription savings gifting' service. Customers aged 14 or older can pay a deposit between 20,000 and 100,000 KRW and gift the subscription by entering the recipient’s phone number and real name. However, minors under 19 are only credited for up to 2 years of membership, so opening the account at age 17 is the most reasonable.

Half of the metropolitan area citizens qualify for first priority... Some argue the subscription account is useless

▲Some argue the 'subscription account is useless'...

In the metropolitan area including Seoul, Incheon, and Gyeonggi Province, over half of all subscribers (7,671,100 out of 14,428,193) qualify for first priority. This is why the 'subscription account useless theory' arises. According to Korea Real Estate Agency’s Chungyak Home, as of the end of last December, the number of housing subscription savings account holders was 25,559,156, an increase of 1,803,055 from a year earlier (23,756,101). The total number of subscription accounts, including housing subscription savings, subscription savings, subscription deposits, and subscription bonds, reached 27,224,983, exceeding half of the total population (51,829,023). Among them, the number of account holders with first priority qualification is as high as 13,052,020.

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