Military Mutual Aid Association Adjusts Member Savings Interest Rates

Retirement Benefits and Split Benefits Interest Rate Increased by 0.30%p from 4.40% to 4.70%
Adjustment of Lump-Sum Deposit Savings Interest Rate Following Reduction in Commercial Bank Fixed Deposit Rates

The Military Mutual Aid Association is planning to raise the interest rates on members' retirement benefits and installment payments to enhance members' welfare and stabilize their lives. Additionally, considering the downward trend in market interest rates, the interest rates on deposit-type lump-sum entrusted savings will also be adjusted.

The Military Mutual Aid Association intends to increase the interest rate on members' retirement benefits and installment payments from the current 4.40% to 4.70%, a 0.30 percentage point increase. The revised interest rate will be applied from July 1 after going through the resolution process at the delegates' meeting soon.

Members' retirement benefits are compound interest products where interest is earned on interest, and they benefit from a low tax rate (0%~6.50%) instead of the interest income tax (15.4%) applied by commercial banks. Another significant advantage is that these benefits are excluded from comprehensive financial income taxation.

Furthermore, the Military Mutual Aid Association will adjust the interest rates on deposit-type lump-sum entrusted savings in response to the recent decline in market fixed deposit rates. From July 1, the interest rate for 1-year maturity products will be set at 4.90%, and for 2-year maturity products at 5.00%. Although the rates are lowered, considering that the average 1-year fixed deposit rate at commercial banks is about 3.60%, this remains approximately 1.30 percentage points more favorable. Also, for those who subscribed before July 1, the interest rate at the time of subscription will be applied until maturity, even if the rates are adjusted.

The Military Mutual Aid Association’s ability to maintain competitive interest rates is thanks to its sound financial structure. The association has achieved seven consecutive years of surplus management recently and maintains the highest level of financial soundness ever, with capital surplus exceeding 1.3 trillion won. Capital surplus refers to the excess funds remaining after paying members’ principal and interest in a lump sum and is used as a key financial soundness evaluation indicator for major mutual aid organizations.

Jae-gwan Jeong, Chairman of the Military Mutual Aid Association, stated, “We adjusted the interest rates prioritizing the association’s founding purpose of stabilizing members’ lives and enhancing their welfare,” and added, “The Military Mutual Aid Association’s savings products, which expand member welfare and guarantee higher interest rates than the market, will be a good choice for our members.”

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