The Financial Services Commission said on the 21st that applications to enroll in Youth Future Installment Savings, a policy finance product to support asset building for young people, will be accepted for two weeks from the 22nd through the 3rd of next month. Including government contributions and tax exemptions on interest income, participants can achieve an effect similar to signing up for an installment savings account with an annual rate of up to 19%.
Youth Future Installment Savings is available to people ages 19 to 34 (born Jan. 1, 1991, to Aug. 7, 2007). You can enroll only if your income for the previous year is verified by the National Tax Service, and for those who completed mandatory military service, the service period (up to six years) is excluded when calculating age.
For the standard type with a 6% government matching contribution, wage earners with total annual salary of 60 million won or less (comprehensive income of 48 million won or less) and small business owners with annual revenue of 300 million won or less are eligible to enroll. Among employees of small and midsize enterprises (SMEs), those with total annual salary of 36 million won or less, newly hired SME workers with total annual salary of 60 million won or less, and small business owners with annual revenue of 100 million won or less can enroll in the preferential type, which provides a 12% government contribution. Enrollees must have household income at or below 150% to 200% of the median income standard.
The standard type offers an effect equivalent to a simple-interest installment savings account with an annual rate of 13.2% to 14.4%, and the preferential type 18.2% to 19.4%. Deposits are made on a free-savings basis up to a monthly maximum of 500,000 won, with a three-year maturity.
Youth Future Installment Savings can be opened non-face-to-face through the apps of participating financial institutions. From the 22nd to the 26th, applications will follow a five-day rotation based on birth year: on the 22nd, those whose birth year ends in 1 or 6; on the 23rd, 2 or 7; on the 24th, 3 or 8; on the 25th, 4 or 9; and on the 26th, 5 or 0 are eligible to apply.
You cannot enroll in both Youth Future Installment Savings and the existing Youth Leap Account at the same time. New enrollment is not allowed even after the Youth Leap Account matures, but existing Youth Leap Account holders may switch to Youth Future Installment Savings. Youth Future Installment Savings does not select enrollees on a first-come, first-served basis. However, if the number of applicants who meet the eligibility requirements exceeds the budgeted support capacity, the plan is to select enrollees in order of lower individual income.