The Lee Jae-myung administration's "Youth Future Savings," which replaces the previous administration's "Youth Leap Account," will launch in June next year. Youth Future Savings is designed so that a person age 34 or younger with income of 60 million won or less can accumulate a lump sum of more than about 20 million won by paying up to 500,000 won each month for three years.
The Financial Services Commission held a Youth Future Savings task force (TF) meeting at the Government Complex Seoul in Gwanghwamun, Seoul, on the 12th and discussed the basic direction of the product design. The Ministry of Economy and Finance, the Ministry of Employment and Labor, the Ministry of SMEs and Startups, the Korea Federation of Banks, and the Korea Inclusive Finance Agency (KINFA) took part in the meeting.
The Financial Services Commission said, "The government support ratio (6% or 12% of the contribution) is the highest among youth asset-building products to date, and the maturity is set at three years to ease the burden of the long maturity of the existing Youth Leap Account and to guide asset formation at an appropriate level."
If you contribute 500,000 won every month for three years, the principal is 18 million won. Adding the 6% government contribution paid to the standard type (general youth) brings it to 19.08 million won, and adding the 12% support rate for the preferred type (youth newly employed at a small or midsize enterprise) brings it to 20.16 million won.
Assuming an annual interest rate of 5%, the amount received at maturity increases to about 20.8 million won and 22 million won, respectively. The interest rate will be finalized after participating banks are confirmed.
The government is pushing a plan to make interest income from Youth Future Savings fully tax-exempt. It also plans to prepare a switching option for subscribers to the Youth Leap Account, a product of the Yoon Suk-yeol administration.