Nearly 40,000 Subscribers: Why Is the 'Preferential Savings Deduction for SME Employees' So Popular?

Helping Employees Build Savings and Stay Longer
Three-Year Option Gains Popularity
Program Now Available at Four Banks Starting the 15th

The "Preferential Savings Deduction for SME Employees" has attracted nearly 40,000 subscribers just over a year after its launch. The program is recognized for helping SME employees build substantial savings while also encouraging long-term retention of key personnel, and is expected to help alleviate labor shortages faced by small and medium-sized enterprises.

According to the Ministry of SMEs and Startups on December 16, more than 37,000 people have enrolled in the Preferential Savings Deduction for SME Employees so far. Launched in October last year through a partnership between private banks and the government, this product has seen participation from about 7,100 companies, with an average of more than five employees per company signing up. In comparison, previous programs offering preferential benefits to SME employees, such as the Tomorrow Filling Deduction and the Youth Employee Tomorrow Filling Deduction, had an average of two subscribers per company, meaning that more than twice as many workers are benefiting from this new product.

On the 17th of last month, at the 'Preferential Savings Deduction Agreement Ceremony for Small and Medium Enterprise Employees' held at the Bankers Hall in Jung-gu, Seoul, Han Sung-sook, Minister of the Ministry of SMEs and Startups (second from left), and Kang Seok-jin, Chairman of the Small and Medium Business Promotion Corporation (first from right), among others, are taking a commemorative photo. Ministry of SMEs and Startups

The core feature of this product is the provision of preferential interest rates through the participation of private banks, while companies also contribute a portion, significantly increasing the benefits employees can receive. If an SME employee deposits between 100,000 and 500,000 won per month, the company contributes an additional 20% of the employee’s deposit, and upon maturity, the employee receives the full amount including interest. According to the Korea SMEs and Startups Agency, which manages the program, banks offer preferential interest rates of up to 4.5%. If an employee deposits 500,000 won per month for five years, they can receive approximately 39.8 million won before tax, which is 133% of the total amount deposited.

Another reason for the growing interest in this product is the introduction of a new three-year option in September, which has expanded subscriber choices. While the original five-year product was advantageous for long-term asset building, there was demand from those who found the longer savings period burdensome. In response, the Korea SMEs and Startups Agency explained that it has developed a more flexible product structure. Although less than three months have passed since the launch of the three-year product, 675 people have already signed up. Since its introduction, more than 55% of new subscribers have chosen the three-year option, indicating its high popularity.

Starting from the 15th, KB Kookmin Bank and NH Nonghyup Bank have been newly added as participating banks, which is expected to further accelerate subscriber growth. With this expansion, the product is now available at a total of four banks, including the existing IBK Industrial Bank of Korea and Hana Bank. Kang Seok-jin, Chairman of the Korea SMEs and Startups Agency, stated, "We will continue to strengthen the effectiveness of the Preferential Savings Deduction so that it not only supports asset building and long-term retention for SME employees, but also helps SMEs secure a stable workforce."