Shinhyup has launched a savings-oriented mutual aid product that operates at a fixed rate for three years. Holders who maintain the product until maturity receive a 4% compound annual rate.
The National Credit Union Federation of Korea (Shinhyup) on the 7th released "Non-Dividend Shinhyup 4U Savings Mutual Aid," a three-year lump-sum savings mutual aid product. The product is structured so that subscribers pay the mutual aid premium in a single lump sum at enrollment and receive a fixed compound annual rate of 4% if they maintain the contract through the three-year maturity.
Mutual aid products allow members to pay a certain amount and receive a payout at maturity or upon an incident, sharing characteristics similar to insurance. This product emphasizes the savings function, with the interest rate fixed during the subscription period, meaning subscribers receive the agreed rate at maturity even if market rates decline.
While simple-interest products apply interest only to the principal, compound-interest products apply interest to accrued interest as well, amplifying the cumulative effect over time. For example, a 55-year-old man who pays a lump-sum mutual aid premium of 50 million won would receive 54.718 million won before tax after three years. Pre-tax interest income amounts to approximately 4.718 million won, with an expected refund rate of 109.4%.
The product also includes a coverage function. If the subscriber dies, a death mutual aid payment is provided, consisting of 3% of the basic lump-sum mutual aid premium plus the policyholder reserve at the time of death. Unlike standard deposits and installment savings, this combines the distinctive coverage nature of a mutual aid product.
Liquidity features are also in place. Contract holders can make mid-term withdrawals up to 12 times per year, within a limit of 50% of the surrender value. The structure allows subscribers to access some funds in cases of sudden medical expenses, living costs, or other emergency needs.
A pension conversion function is also available for retirement planning. Through the "Non-Dividend Pension Conversion Rider II," subscribers can convert maturity mutual aid payments into pension-style payouts. Subscribers can choose among three options: a lifetime pension paid during the subscriber's lifetime, a fixed-term pension paid over a set period, or an inheritance-type pension that maintains the accumulated amount, pays only interest, and passes the remaining balance to heirs upon death.
Subscription is open to those aged 15 to 80. The lump-sum mutual aid premium starts from 1 million won. However, because the surrender value may be less than the paid premium in the event of early termination, subscribers should review the product manual and terms before enrolling.
Shinhyup mutual aid products are protected under the Shinhyup Act by the Credit Union Depositor Protection Fund. Pension savings mutual aid, accident mutual aid payments, and other mutual aid payments are each separately protected up to a maximum of 100 million won per person.
Meanwhile, Shinhyup Chairman Koh Young-chul and Son Sung-eun, CEO of the credit and mutual aid business, became the first and second customers, respectively, by enrolling at Hanuri Shinhyup on the product's launch date. Shinhyup emphasized trust in the product's competitiveness and stability through the management's enrollment.
