Youth Hope Savings → Youth Leap Account Lump-Sum Payment Linkage Promoted...Higher Returns Expected

The government will allow the lump-sum deposit of matured refund amounts from the Youth Hope Savings into the Youth Leap Account. Depending on the lump-sum deposit amount, the yield is expected to reach up to the 17% range. The immediate refund limit of the post-tax-free shop, currently capped at a total of 2.5 million KRW, will also be reviewed for an increase.

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho, visiting Marrakech, Morocco to attend the International Monetary Fund (IMF) and World Bank (WB) Annual Meetings, is answering reporters' questions on the 13th (local time). / Photo by Marrakech Joint Press Corps

On the 13th (local time), Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho met with reporters just before returning home after concluding the International Monetary Fund (IMF) and World Bank (WB) annual meetings in Marrakech, Morocco, stating, “We will make institutional adjustments before the maturity of the Youth Hope Savings and open opportunities to additionally utilize the funds in the Youth Leap Account.”

The Youth Hope Savings is a savings product announced by the government to help young people build assets. If deposited up to 500,000 KRW per month for two years, the government adds a 3% subsidy on the deposited amount. It was launched in February last year under the Moon Jae-in administration, and by February next year, about 2 million subscribers are expected to receive refunds of up to 13 million KRW per person. The plan is to link this so that the refund can be deposited at once into the Youth Leap Account operated by the Yoon Suk-yeol administration.

Deputy Prime Minister Choo explained, “When the Youth Hope Savings matures, we will open the way to deposit the amount at once into the Youth Leap Account to receive various benefits,” adding, “Currently, the deposit limit is 700,000 KRW per month, but even if 12 to 13 million KRW is deposited, the tax benefits and government support will be applied equally.” He further noted, “Because the benefits are much greater than saving the matured refund in a regular commercial bank, the 5-year maturity yield will increase significantly.”

Assuming a deposit of 12.6 million KRW (700,000 KRW × 18 months) into the Youth Leap Account and monthly deposits of 700,000 KRW from the 19th month onward, a total of 49.4 million KRW can be received after 5 years. Combining the after-tax interest of 4.96 million KRW and the subsidy of 1.44 million KRW, the yield is 17.6%. This is higher than the 16.5% yield when subscribing monthly to the Youth Leap Account and about 10 percentage points higher compared to the 7.9% yield of a general savings product with a 3.4% interest rate.

The Ministry of Economy and Finance plans to promote amendments to the Restriction of Special Taxation Act based on this during this year’s regular National Assembly session. They also plan to revise the terms and conditions of the Youth Leap Account product through consultations with financial institutions.

The ministry also expressed intentions to raise the immediate refund limit of post-tax-free shops. The post-refund system allows foreign tourists to receive refunds on value-added tax and individual consumption tax when exporting goods purchased at post-tax-free shops abroad within 3 months. The refund method varies depending on the time and place, but to receive immediate benefits when purchasing goods at post-tax-free shops, the refund amount is limited to “less than 500,000 KRW per transaction and less than 2.5 million KRW in total.”

Deputy Prime Minister Choo said, “The refund limit has been sporadically adjusted upward in the past, but this time we plan to raise the refund limit,” adding, “We are currently reviewing how much to raise it, but we are considering a significantly increased limit compared to now.”

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