64% of Brokerage ISA Accounts Hold Less Than 10,000 Won

More than 60% of brokerage-type Individual Savings Accounts (ISA) in South Korea are effectively empty despite the product approaching 6 million subscribers, data showed.

According to data submitted by the Korea Financial Investment Association to the office of Democratic Party lawmaker Min Byung-duk, 64.2% of brokerage ISA accounts held balances of 10,000 won ($7) or less as of end-October this year. Of the total 5.89 million accounts, 3.78 million were classified as dormant accounts with virtually no transactions or only minimal balances remaining.

The ratio of actual deposits following account openings has fallen far short of expectations, revealing a widening gap between outward growth and actual internal demand.

The number of brokerage ISA subscribers has steadily increased since the product was first introduced in 2021. The popularity of brokerage accounts that allow individuals to directly hold stocks has grown amid rising interest in both domestic and overseas stock markets. Account openings expanded rapidly as securities firms widely promoted multi-account opening events and tax benefits.

However, the flow of funds has shown a completely different pattern from the growth in account numbers. While total brokerage ISA balances reached 28.47 trillion won, accounts with balances of 10,000 won or less held only about 600 million won combined, accounting for just 0.002% of total assets. Although the number of accounts has surged, actual invested funds are extremely concentrated.

Critics point out that while public interest in tax savings and account-securing purposes has driven a surge in sign-ups, the phenomenon of accounts remaining idle without actual investment activity has become structurally entrenched.

"Contrary to the original purpose of brokerage ISAs being designed as long-term investment accounts, they have ended up merely inflating subscription numbers without forming an active investment base," an industry official said.