A bank’s mobile app offering the Youth Hope savings product (Yonhap)
The state-guaranteed savings account would allow South Korean residents between the ages of 19 and 34 to subscribe and submit a monthly payment of up to 700,000 won for a term of 10 years, with an annual return of 3.5%, released a booklet of Yoon’s presidential commitments. by the People Power Party showed on Tuesday. In addition to the subscriber payment, the government plans to add up to 400,000 from its own budget, bringing the total maximum monthly payment to 1.1 million won.
Subscribers can turn the savings account into a deposit account or mix the wallet with stocks and bonds, although related details have yet to be revealed.
The savings account mirrors the Moon Jae-in administration’s “Youth Hope Savings Product,” which has registered a total of 2.9 million subscribers aged 19 to 34. The product sold between late February and early March requires applicants to submit a monthly payment of 500,000 won for a term of 2 years with an annual return of around 10%.
Unlike the Moon administration’s savings account which only accepted subscribers whose annual income was less than 36 million won, Yoon plans to lift the cap and accept everyone in the age bracket regardless of age. whatever their income.
Instead, different benefits will be offered to different income brackets. Those with an annual income of less than 36 million won will receive more government funding than those earning more than 36 million won.
The account will only accept subscribers without a similar state-backed savings account, which means subscribers to the Youth Hope savings product will need to close their accounts in order to open the new one.
Despite growing anticipation of news of the account, onlookers have expressed concerns about the size of the state budget needed to fund the program. The Youth Hope savings product with 2.9 million subscribers will require 1.4 trillion won over the next two years. By the same calculation, Yoon’s savings account will need at least 34 trillion won over the planned 10 years as more subscribers are expected.
According to Statistics Korea, the number of employed South Koreans between the ages of 20 and 34 stood at 6.3 million in July last year.
By Jung Min-kyung (firstname.lastname@example.org)