"Annual 9% Interest?" Surge in Subscribers to 'Cheongnyeon Doyak Account' as Interest Rates Fall

Youth Leap Account Applications Surge Amid Prolonged Low Interest Rates

Young Jump Account non-face-to-face consultation center counselors in Jung-gu, Seoul are providing consultations. Photo by Jinhyung Kang aymsdream@

As base interest rates decline rapidly, the number of applications for the Youth Leap Account, which offers an effective annual savings rate of around 9%, is surging.

According to the financial sector on the 9th, there were 170,000 new applications for the Youth Leap Account last month. Considering that the subscription period was only seven days, the average daily number of applicants reached approximately 24,300. This is more than five times the average daily applicants of 4,400 in the previous month.

Applications for the Youth Leap Account continue to surge this month as well. The subscription period for this month runs from the 3rd to the 14th, and as of the 6th, a total of 116,000 people had applied. The average daily number of applicants over four days was 29,000.

The Youth Leap Account is a policy financial product designed to allow young people to accumulate up to 50 million KRW by freely depositing up to 700,000 KRW per month over five years, combining bank interest with government contributions. Only youth aged 19 to 34 at the time of new subscription are eligible to apply. Notably, from January this year, government contributions have been increased, raising the effective annual return from a maximum of 8.87% to 9.54%.

The surge in popularity of the Youth Leap Account is closely related to the recent low-interest-rate environment. According to the Bank of Korea, the interest rate on regular savings deposits at deposit banks (based on new contracts) was only around 3.2% annually in December last year.

Since market bank deposit rates have long been in the 2% range, and even savings banks and internet-only banks, which previously offered relatively higher rates, have recently dropped below 3%, interest in the Youth Leap Account has increased.