Youth Hope Savings Maturity, One-Time Payment Allowed
Marriage and Childbirth Added as Special Early Termination Reasons
"Linkage with Housing Policy Also Promoted"
Vice Chair Kim So-young Holds Operation Inspection Meeting
From the 25th, a policy allowing maturity recipients of the 'Youth Hope Savings' to switch to the 'Youth Leap Account' will begin. The 'Youth Leap Account,' promoted as part of the government's youth support measures, offers expected returns more than 2.6 times higher than other savings products when linked with the Youth Hope Savings.
In particular, the government has included special early withdrawal reasons such as marriage and childbirth and provides tax-exempt benefits even if the 'Youth Leap Account,' which has a 5-year maturity, is terminated early after being subscribed for more than 3 years.
On the 18th, Kim So-young, Vice Chairman of the Financial Services Commission, held a 'Youth Leap Account On-site Opinion Gathering and Operation Inspection Meeting' at the Youth Leap Account Non-face-to-face Consultation Center in Jung-gu, Seoul, ahead of the introduction of the 'Youth Leap Account.' She stated, "Starting from February, it will be allowed to make a lump-sum deposit of the maturity amount from the Youth Hope Savings into the Youth Leap Account, and the government will match the deposit amount with a lump-sum contribution."
She added, "We are also working on linking the Youth Leap Account maturity with housing policies and plan to flexibly adjust the tax exemption criteria to help young people build stable assets."
The maturity of the Youth Hope Savings will occur between February 21 and March 4, and young people who meet the subscription requirements for the 'Youth Leap Account' can apply for linked subscription starting from the 25th. The lump-sum deposit condition allows for a minimum of 2 million KRW and a maximum of 13 million KRW, enabling the entire maturity amount to be deposited into the account at once. The lump-sum deposit will be used as the monthly payment resource based on the 'monthly set amount' chosen by the subscriber at the initial account setup.
The 'Youth Leap Account' is a product that can expect returns more than 2.6 times higher compared to regular savings. According to the Financial Services Commission, if a lump sum of 12.6 million KRW is deposited with a monthly set amount of 700,000 KRW and an interest rate of 6%, the maturity profit will be 8.56 million KRW, which is more than 2.6 times higher than the 3.2 million KRW from a regular savings account (average interest rate 3.54%).
Youths who have terminated their Youth Hope Savings upon maturity and received the maturity amount can open a Youth Leap Account between February 22 and March 15. Those applying for lump-sum deposits must deposit the full lump-sum amount at the time of account opening.
The Financial Services Commission has also ensured that government contributions and tax-exempt benefits are available even if the account is terminated due to unavoidable reasons such as marriage and childbirth. To support asset formation for young households temporarily focused solely on childcare, youths with no income in the previous tax period but receiving parental leave pay or parental leave allowance can also subscribe to the account.
Vice Chairman Kim explained, "We have allowed young parents on leave dedicated to childcare to subscribe to the account even if they have no taxable income, as long as they receive parental leave pay."
He added, "To prepare for unexpected financial needs during the independence process, marriage and childbirth have been added as special early withdrawal reasons, and youths who maintain their subscription for more than 3 years will be exempt from taxes even if they withdraw early."
Meanwhile, the Financial Services Commission urged related agencies to make efforts regarding the operation of the 'Youth Leap Account.' Vice Chairman Kim said, "The Korea Inclusive Finance Agency should ensure that those whose Youth Hope Savings are maturing can easily and timely subscribe to the Youth Leap Account," and "We ask the handling banks to improve early withdrawal interest rates so that youths who have maintained their accounts for a considerable period can still enjoy partial asset formation benefits even if they must withdraw early."
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