[Real-Life Finance] "The Government Will Create 10 Million Won"… Youth Policy Finance Boom

'Youth Hope Savings' Launch on 21st This Month
9% Interest Effect for 12 Million Won Deposit
Products Also for SME Employees and Soldiers

The government and financial authorities are launching various "savings" products as part of policy financial products. If conditions are met, these offer more stability and greater benefits than private financial products, attracting the attention of financial consumers.

According to the Financial Services Commission, the Youth Hope Savings will be launched on the 21st. The Youth Hope Savings is a financial product introduced by the government to help low-income young people build assets. Deposits can be freely made up to 500,000 KRW per month, with a maturity period of 2 years.

If deposits are made until maturity, in addition to the bank interest rate, a savings incentive is provided. The savings incentive supports 2% of the first-year deposit amount and 4% of the second-year deposit amount. Assuming a total deposit of 12 million KRW over 2 years at 500,000 KRW per month and a bank interest rate of 5%, the bank interest would be about 625,000 KRW. On top of this, a savings incentive of 360,000 KRW is supported by the national budget, and the interest income tax of 15.4% is exempted.

A Financial Services Commission official explained, "Through interest income tax exemption and savings incentive support, an effect similar to a general savings account with an annual interest rate of about 9% can be provided."

The eligibility criteria are young people aged 19 to 34 as of the subscription date. Military service periods (up to 6 years) are excluded from the age calculation. Also, the total salary in the previous tax period (January to December of last year) must not exceed 36 million KRW. Based on comprehensive income, personal income must be 26 million KRW or less.

Eligibility can be checked through commercial bank applications (apps). By using the Youth Hope Savings preview service, one can immediately subscribe without going through the eligibility verification process once the product is officially launched.

Young Workers in SMEs and Soldiers Can Build Lump Sums Using Policy Finance

If employed at a small or medium-sized enterprise (SME), one can use the "Youth Tomorrow Filling Deduction." Under this system, a young worker employed at an SME with 5 or more employees who saves 3 million KRW over 2 years will have funds jointly accumulated by the company (3 million KRW) and the government (6 million KRW). This policy helps young people build assets, forming an initial lump sum of 12 million KRW.

This program was first introduced in 2016, and over 500,000 young people have enrolled cumulatively over 5 years. About 130,000 young people have received the maturity amount. This year, the government plans to enhance the program's effectiveness through systematic management of unfair treatment and addressing blind spots in support via institutional reforms.

If a young person is already working at a small or medium-sized enterprise, they can use the "Youth Employee Tomorrow Filling Deduction." The subscription period for this product has been extended by one year until the end of this year. It is available to young workers aged 34 or younger who have been employed for at least 6 months at small or medium-sized enterprises. If the worker saves 120,000 KRW monthly for 5 years (totaling 7.2 million KRW), combined with government and company contributions, they will receive a lump sum of 30 million KRW.

If serving in the military, one can subscribe to the "Soldier Tomorrow Preparation Savings." This policy financial product was created to support soldiers in preparing a lump sum after discharge, linked to planned salary increases. The Ministry of National Defense launched it through agreements with the Ministry of Justice, the Korea Federation of Banks, the Military Manpower Administration, and 14 commercial banks. Deposits of up to 400,000 KRW per month are allowed.

Starting this year, subscribers will receive a "3-to-1 matching support fund" from national resources. From deposits made in January this year, the government will additionally support 33% of the principal and interest according to the ratio. For example, if an Army soldier deposits 400,000 KRW consistently for 18 months, upon discharge, they can receive a lump sum of about 10 million KRW, combining the bank's base interest rate (5% annually), interest support (1%), and matching support.

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