"Only Until the End of September"... Government's Move as Subscription Savings Account Cancellations Increase [Financial Microscope]

48 Years Since the Launch of the Subscription System...
Subscribers Declining for 2 Years and 7 Months
Conversion to 'Housing Subscription Comprehensive Savings' Allowed Until End of September...
What Are the Benefits?
Benefits Enhanced, But Detailed Conditions Must Be Carefully Reviewed

The so-called 'subscription savings account,' often regarded as the 'basics of financial investment' and a 'cheat key to owning a home,' has returned with even stronger benefits. In prime locations where subscription competition rates are high, combined with increased sale prices due to rising construction costs, more people have been canceling their subscription accounts amid the 'subscription futility theory.' In response, the government has introduced enhanced benefits such as an increased monthly payment limit and income deduction benefits. If you are considering canceling your subscription account, it is necessary to carefully review the revised subscription system and benefits to weigh the pros and cons.

48 Years Since the Introduction of the Subscription System... Number of Subscribers Declining for 2 Years and 7 Months

The 'Housing Subscription Comprehensive Savings,' commonly called the 'subscription savings account,' is a savings product that can be paid in the form of installment savings or lump-sum deposits to receive national housing and other housing supplies. It can be subscribed to at commercial banks entrusted by the Housing and Urban Fund (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup, IBK Industrial, iM Bank, Busan, Gyeongnam banks). Not only Korean nationals but also overseas Koreans and foreign residents living in Korea can subscribe. Payments can be freely made monthly from a minimum of 20,000 KRW to a maximum of 500,000 KRW.

The subscription system started in 1977 with the 'Regulations on Priority Supply of National Housing' and has now reached its 48th year. Initially, it applied only to public housing, but from the following year, the subscription system was also applied to private housing. In the early days of the subscription system, it was divided into ▲subscription savings ▲subscription installment savings ▲subscription deposits depending on whether it was public or private housing. However, in May 2009, the 'Housing Subscription Comprehensive Savings' was introduced, and from September 2015, it was unified under the 'Housing Subscription Comprehensive Savings,' allowing subscription for all types of housing through this product.

According to the Korea Real Estate Board, as of the end of January 2025, the number of subscription savings account holders (combined subscription savings, installment savings, deposits, and housing subscription comprehensive savings) was 26,441,690 accounts. This is a decrease of 43,533 accounts compared to the previous month (26,485,223 accounts) and a decrease of 537,684 accounts compared to the previous year (January 2024). The number of subscription savings account holders has been declining for 2 years and 7 months since June 2022.

Conversion to 'Housing Subscription Comprehensive Savings' Possible Until the End of September This Year... What Are the Benefits?

The government has temporarily allowed existing subscription savings, installment savings, and deposit subscribers to convert to the Housing Subscription Comprehensive Savings until September 30 this year. Even after conversion, the amount and period of past payments are recognized as is. Previously, subscription savings subscribers could only apply for public housing, and subscription deposit and installment savings subscribers could only apply for private housing. After conversion, subscription is possible without distinction. Additionally, from next year, it is expected that conversion to Housing Subscription Comprehensive Savings at other banks will also be possible.

Interest rate benefits have also been enhanced. Currently, the housing subscription savings interest rate is up to 3.1%, and under this government, the interest rate has been raised three times to encourage subscription savings account enrollment. In particular, the Youth Housing Dream Subscription Savings, available to youth aged 19 to 34, offers an interest rate of up to 4.5% per annum.

The monthly recognized payment amount has also been expanded from the existing 100,000 KRW to 250,000 KRW. This adjustment in recognized payment amount is the first in 41 years since the subscription savings account system was introduced in 1983. Currently, in public sales, winners are selected based on the total savings amount, with the winning threshold around 15 million KRW. With the monthly recognized payment limit increased to 250,000 KRW, if one deposits 250,000 KRW monthly into the subscription savings, a subscription account with about 15 million KRW saved can be built in approximately 5 years. Also, from this year, the income deduction limit for subscription savings accounts (Housing Subscription Comprehensive Savings and subscription savings) has been raised from 2.4 million KRW to 3 million KRW. The income deduction benefit scope has been expanded not only to the head of a household without a home but also to their spouse.

According to the revision of the 'Regulations on Housing Supply,' when applying for general supply of private housing, points can be combined by adding 50% of the subscription period of the spouse's account, up to a maximum of 3 points, as an advantage. The recognized payment period for minors has also been extended from 2 years to 5 years. Because of this, whereas previously subscription accounts were created for children at age 17, now they can be created from age 14, allowing for a longer recognized payment period.

Benefits Increased but Detailed Conditions Must Be Carefully Considered

Although benefits have been expanded, it is necessary to carefully check detailed conditions to determine whether it is advantageous or not. A representative example is whether the subscription period and payment performance are recognized when converting to Housing Subscription Comprehensive Savings. For example, when a subscription savings (public housing) subscriber converts to Housing Subscription Comprehensive Savings, the existing payment period and amount are recognized for public housing, but for private housing, only the performance after conversion is recognized.

If you have a house you want to apply for, you should also carefully check the timing of conversion. You must convert by the 'day before' the first public announcement date of the housing you want to apply for to be able to apply with the Housing Subscription Comprehensive Savings.

It should also be noted that Housing Subscription Comprehensive Savings can only be inherited. Existing subscription savings and subscription deposits/deposits subscribed before March 26, 2000, can be gifted not only to children but also to spouses and direct ascendants or descendants who are household members. On the other hand, Housing Subscription Comprehensive Savings and subscription deposits/deposits subscribed after March 27, 2000, can only be inherited by children upon the subscriber's death. Also, once converted to Housing Subscription Comprehensive Savings, it is impossible to revert to the previous subscription savings, installment savings, or deposits.

An official from a commercial bank advised, "If the payment period is long and there is no plan to purchase a house within 1 to 2 years, it is advantageous to maintain the subscription savings account," adding, "If you are considering applying, you should weigh the pros and cons carefully before deciding to convert to Housing Subscription Comprehensive Savings."