[Practical Finance] Don't Just Buy Toys, Teach How to Live

Starting Lunar New Year Money Management with Sebaetdon
Enroll in Installment Savings Financial Products from Childhood
Good to Teach Children Money Management Habits
Interest in Traditional Bank Savings for Stability Guaranteed

[Asia Economy Reporter Kangwook Cho] "Do not give your child a fish, but teach them how to fish." This proverb from the Jewish community, which drives the global economy, remains a famous saying to this day. The entrenched perception of class distinctions such as gold spoon and dirt spoon is also why the need for financial education from childhood is emphasized. So, how about starting financial management with the New Year's money received during this Lunar New Year holiday? Around the holiday, there is a surge in demand for signing up for installment savings financial products with New Year's money, making it popular as an opportunity to help children develop a habit of managing money steadily.

The most traditional method of New Year's money financial management is bank savings and deposits with guaranteed safety. Most commercial banks offer higher interest rates to child customers than to general customers.

First, KB Kookmin Bank offers the 'KB Young Youth Package' product. The 'KB Young Youth Installment Savings' has a base interest rate of 1.6% per annum (before tax), which is higher than other banks, and provides an additional preferential interest rate of up to 1.3 percentage points. Targeting customers under 19 years old, the 'Young Youth Installment Savings' is a one-year flexible installment product with a maximum deposit amount and base interest rate of 3 million KRW and 1.6%, respectively, which are relatively high. It also offers an additional service of free enrollment in child insurance covering risks such as fracture surgery costs, food poisoning, and bicycle accident injuries, attracting attention. As of the 29th, the number of new accounts reached 65,300, with a balance of 124.5 billion KRW.

Also, the 'KB Young Youth Children's Account' targets customers under 14 years old, with a base interest rate of 0.1%. However, by setting a piggy bank (up to 1 million KRW), customers can receive a preferential interest rate of up to 2.0%. It also provides free trial programs of NE Neungyule's early childhood specialized education brand i-Challenge and English learning content NE Times. For teenagers aged 14 to under 19, the 'KB Young Youth Teen Account' offers a base interest rate of 0.1% per annum, fee exemption, airline mileage accumulation, and free trial service of NE Times.

Shinhan Bank has introduced the 'Kidzania Dream Installment Savings' for infant customers. The installment savings offer a maximum annual interest rate of 2.50% and is a one-year flexible installment product. Customers who newly subscribe to the installment savings for the first time in the last three months receive a special preferential interest rate of 1.0 percentage point per annum, and all Kidzania customers receive an additional 0.5 percentage point per annum. Subscribers to this installment savings receive a 35% discount coupon for a half-day admission ticket to Kidzania and 'Kizo' coupons, Kidzania's exclusive currency, sent to their registered mobile phone numbers. Additionally, the 'Shinhan My Junior Installment Savings' for customers under 18 requires a minimum new deposit of 10,000 KRW, a quarterly maximum subscription amount of 1 million KRW, and allows re-deposit for up to three years. The base interest rate is 1.50% per annum, with preferential interest rates of 0.5% for housing subscription savings holders, 0.5% for automatic transfers of six or more times, 0.3% for child allowance recipients with Shinhan Bank accounts up to the month before last, 0.3% for check card usage, and 0.1% for re-deposit accounts, applying a maximum interest rate of 2.5%. It also provides services such as 10% discounts on Beanpole Kids products, up to 20,000 Dream Points per person for new annual Everland passes, and free enrollment in safety insurance.

Woori Bank's 'Woori Child Happiness Installment Savings' offers an annual interest rate of 1.6% (with a preferential rate of 0.2%) based on a 12-month maturity. Additionally, when parents and children subscribe simultaneously, an extra 0.1 percentage point per annum is provided, and registering automatic transfers from Woori Yoohoo Account or Woori Child Happiness Account grants another 0.1 percentage point per annum, totaling up to 0.2% additional interest. The 'Woori Child Happiness Account' is a demand deposit account with a low base interest rate of 0.1%, but if the account balance is 1 million KRW or less and preferential conditions (automatic transfer of at least 100,000 KRW monthly to the Woori Child Happiness Installment Savings) are met, an interest rate of 1.0% can be received.

Hana Bank's 'Child Dream Hana Installment Savings' is characterized by automatic re-deposit in one-year increments until the child turns 19. The base interest rate is 1.45%, with a maximum preferential interest rate of 0.8 percentage points. If the child actually enrolls in the 'Hope University' program, which can be registered until age 14, an additional preferential interest rate of 2.0 percentage points is granted for one year before maturity. As of the 29th, the number of subscribers reached 18,979, with a cumulative amount of 15.4 billion KRW. The 'Hana Child Allowance Installment Savings' for children under six eligible for child allowance has a maximum monthly subscription amount of 100,000 KRW, with a subscription period from a minimum of one year to a maximum of three years in annual increments. The base interest rates are 1.5% per annum for one year, 1.6% for two years, and 1.8% for three years. Additional interest rates of 1.0% per annum are provided when receiving child allowance through the bank's deposit and withdrawal account, and 1.5% per annum when subscribed to housing subscription savings.

NH Nonghyup Bank's 'NH Child Allowance Preferential Installment Savings' is available to individuals under seven years old (one account per person), with a maximum monthly deposit of 100,000 KRW and subscription periods selectable among one, two, or three years. The preferential interest rate is up to 3.5 percentage points per annum: 1.5 percentage points per annum when receiving child allowance through Nonghyup Bank, 0.5 percentage points per annum for housing subscription savings subscription, 0.5 percentage points per annum when siblings subscribe together, and 1.0 percentage point for the third child or later. If all preferential interest rates are applied, a total interest rate of 5.2% per annum can be received for a three-year subscription.

A financial industry official said, "Just like the saying 'many a little makes a mickle,' financial education from childhood is now recognized as essential," adding, "If you carefully review the events of major financial companies and utilize them well, you can surprisingly receive great benefits."