The Youth Future Savings Account, offering up to 17 percent annual returns, will launch in June. Young people with annual gross income of 36 million won ($26,000) or less can accumulate approximately 22 million won ($16,000) in three years by depositing 500,000 won monthly.
According to the Financial Services Commission (FSC) on Tuesday, the Youth Future Savings Account, an asset-building program under the Lee Jae-myung administration, will be sold through commercial banks starting in June. The three-year policy savings product allows flexible monthly deposits of up to 500,000 won. It combines bank interest with government contributions and provides tax-exempt benefits on interest income.
Two requirements must be met to open an account. The first is age. Applicants must be between 19 and 34 years old. Those who completed military service can deduct their service period from their age. For example, a 35-year-old who served two years in the military would be considered 33 for eligibility purposes.
The second requirement is having income. Those without income or unable to verify income through the National Tax Service cannot open an account.
Returns are differentiated by income bracket. Small and medium-sized enterprise (SME) workers with gross income of 36 million won or less (or comprehensive income of 26 million won) and small business owners with annual sales of 100 million won or less, whose household income is 150 percent or less of the median, can earn 17 percent annual returns, including a 12 percent government contribution and bank interest. The bank interest rate has not yet been finalized and remains subject to change, but is expected to be set at around 6 percent.
Young people meeting these requirements who deposit 500,000 won monthly for three years can receive 21.97 million won at maturity. This consists of 18 million won in principal, 2.16 million won in government contributions, and 1.81 million won in bank interest.
General income earners with gross income of 60 million won or less (comprehensive income of 48 million won) can expect 12 percent annual returns. Small business owners with annual sales of 300 million won or less and household income of 200 percent or less of the median also qualify for this bracket. By depositing 500,000 won monthly, they will receive 20.82 million won after three years, consisting of 18 million won in principal, 1.08 million won in government contributions, and 1.74 million won in interest.
Those with gross income exceeding 60 million won but less than 75 million won (comprehensive income of 63 million won) receive only tax-exempt benefits on interest income, without government contributions.
Holders of the Youth Leap Account, an asset-building program from the Yoon Suk-yeol administration, can switch without penalty. The switch is recognized as a special termination rather than a regular one, preserving government contributions and tax-exempt benefits. However, the switch is only permitted in June, when the new account first becomes available.
"Even when investing, it is necessary to maintain an appropriate portion of the portfolio in safe assets," an FSC official said. "This will be an alternative for young people who want to safely build seed money."
