The Youth Leap Account continues to be popular, with nearly 410,000 subscribers. As it is a special financial product created by the government for young people, the benefits are great. Please check the conditions for signing up for the Youth Leap Account and how to apply before applying.
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What is the Youth Leap Account?
Conditions for signing up for the Youth Leap Account
How to apply for Youth Leap Account
What is the interest rate applied to the Youth Leap Account?
Youth Leap Account Notes
What is the Youth Leap Account?
The Youth Leap Account is a special financial product for young people launched by this government. Anyone between the ages of 19 and 34 can sign up. The maximum monthly payment amount is 700,000 won and the maturity period is 5 years.
If you make good monthly payments after signing up, the government will add an additional 3-6% of the amount you pay. This means that government subsidies of approximately 2.5 million won will be provided.
In addition, since it is a tax-exempt product that is fully exempt from the 15.4% interest income tax (tax) on interest, it is popular among young people because they can raise a lump sum of 50 million won by combining the government support amount and interest at maturity.
Conditions for signing up for the Youth Leap Account
To sign up for a Youth Leap Account, you must meet both age and income requirements.
👉Age requirements
The age for signing up for the Youth Leap Account is for young people between the ages of 19 and 34. As of this year, 2023, people born between 2004 and 1989 can sign up.
If you have served in the military, up to 6 years are deducted from your age calculation. If you have served two years and are discharged, you can sign up even if you are 36 years old.
👉Income conditions
The income conditions for the Youth Leap Account look at both the subscriber’s own income and the household’s income. When looking at income, it is based on ‘pre-tax’ income, not after-tax income.
1. Personal income must be less than 60 million won per year.
2. The income of the household must be less than 180% of the median income.
Personal income is easy, but what does median household income mean? Median income is a table listing the income of each country in Korea and showing the median value.
In this median income table, you must be below ‘180% of the income level’ to sign up, so you must check what your household income is by referring to the median income table as of 2023.
As of 2023, 180% of the median income is 3.74 million won (before tax) for a single-person household and 6.22 million won (before tax) for a two-person household. Median income varies depending on the number of household members, so it must be viewed according to the number of household members.
Civil servants and public institution employees can also sign up for the Youth Leap Account. However, since the purpose is to raise a lump sum through young people’s work, job seekers or students without income cannot join.
You can sign up even if you are a student or working part-time, but please note that you can only sign up for employment insurance.
How to apply for Youth Leap Account
Applications for the Youth Leap Account began on June 15, 2023. You can sign up for the Youth Leap Account through the mobile applications of 12 commercial banks.
You can apply non-face-to-face between 9:00 am and 6:30 pm on banking days.
Go to button name👉
1. (Subscriber) Install and access the mobile app of your preferred bank.
2. (Subscriber) Apply for membership.
3. (Bank) Inquiry and confirmation of age, income requirements, etc.
4. (Bank) Inform subscribers of availability of subscription
5. (Subscriber) can open an account after receiving guidance (one account per person)
What is the interest rate applied to the Youth Leap Account?
The Youth Leap Account has a fixed interest rate for 3 years and a variable interest rate for the next 2 years.
The interest rates offered by each bank are slightly different. This is because the preferential interest rate may vary depending on the subscriber, and each bank offers a preferential interest rate of up to 1% to 1.7%.
– Nonghyup/Shinhan/Woori/Hana/Corporate/Kookmin/Bank: base interest rate 4.5%, preferential interest rate 1%
– Daegu/Busan/Gyeongnam Bank: base interest rate 4.0%, preferential interest rate 1.5%
– Gwangju/Jeonbuk Bank: base interest rate 3.8%, preferential interest rate 1.7%
※It may vary depending on the time of subscription or subscriber.
Youth Leap Account Notes
1. Are all government subsidies given equally?
The government support for the Youth Leap Account varies depending on the individual’s income level. The lower your income, the more government support you will receive.
Personal income Self-payment limit Government support matching limit (monthly) Matching ratio Government support amount (monthly)
Below 24 million won 700,000 won 400,000 won 6% 24,000 won
Below 36 million won 500,000 won 4.6% 23,000 won
Below 48 million won 600,000 won 3.7% 22,000 won
Below 60 million won 700,000 won 3.0% 21,000 won
Less than KRW 75 million None None None
※Even if you do not make a contribution, you can receive tax-free benefits (tax exemption).
2. The maturity date is long. Can I withdraw money without canceling it?
The Youth Leap Account has a maturity of 5 years, so the payment period is long. Young people may have to spend a large sum of money, such as buying a house.
Withdrawals are not possible, but in this case, you can apply for a savings loan using the Youth Leap Account as collateral without canceling the account. If you apply for a non-face-to-face loan using the Youth Leap Account as collateral, you can benefit from an interest rate discount of up to 1.25%.
We looked into the Youth Leap Account. To summarize, it is as follows.
✔ Youth Leap Account Benefits
– Payment of up to 700,000 won per month, government support provided upon maturity of 5 years, tax exemption benefits
✔ Conditions for signing up for Youth Leap Account
– Young people aged 19 to 34, personal income less than 60 million won, household income less than 180% of median income
According to an announcement from the Financial Services Commission, as of June 21, there were 416,000 subscribers to the Youth Leap Account. Since there was a limit on applications for the last 5 days of birth, approximately 80,000 people signed up per day.
It is expected that the number of applicants per day will increase further as birth year registration restrictions will be lifted from the 22nd.
There was a similar youth savings product under the previous government, and it is said that the cancellation rate among subscribers reached more than 20%.
There are many concerns that this Youth Leap Account may follow a similar process, and it seems likely that the government will create various benefits or options to prevent early cancellation.
I hope that the ‘Youth Leap Account’, a lump-sum savings savings account for young people, will be of great help in building funds for young people, from those just starting out in society to office workers.