ISA subscribers top 10 million — 1 in 4 Korean adults enrolled

The number of individual savings account (ISA) subscribers in South Korea has surpassed 10 million, with self-directed brokerage-type accounts — where holders choose their own products — accounting for nearly 90 percent of all enrollments.

According to the Korea Financial Investment Association, ISA subscribers reached 10.05 million as of the end of August, marking 10 years and five months since the ISA regime was introduced. With the adult population aged 19 and older at roughly 44.07 million, about 23 percent of Korean adults now hold an ISA. Total assets under the accounts reached 76.5 trillion won ($56.2 billion).

The pace of enrollment has also accelerated. The subscriber count stood at about 8 million at the end of January and grew by more than 2 million in just seven months, with roughly 290,000 new accounts opened each month this year. Over the same period, total assets under management rose by nearly 20 trillion won, from about 55 trillion won to 77 trillion won.

The surge is largely attributed to growing retail participation in the stock market as Kospi climbed this year. ISA allows holders to manage a range of financial products — including deposits, funds and shares — within a single account while receiving tax benefits.

The Korea Financial Investment Association said the growth reflects a rush of investment demand into ISA as Kospi posted sharp gains this year, drawing more people into the stock market and prompting them to take advantage of the account's ability to hold diverse products — deposits, funds and shares — under one roof with tax incentives.

Subscribers and assets have concentrated heavily in the self-directed brokerage type. As of the end of August, about 8.975 million people held brokerage-type ISAs, accounting for 89.3 percent of all subscribers.

Trust-type ISA subscribers numbered about 922,000, or 9.2 percent of the total — down from about 1.719 million at the end of 2020, a decline of roughly 797,000. Discretionary accounts, where subscribers delegate portfolio management to professionals based on model portfolios offered by brokerages or banks, also fell over the same period, from about 220,000 to about 152,000.

Enrollment among people in their 20s and 30s has risen sharply. Their share of total subscribers climbed 8.3 percentage points, from 32.8 percent at the end of 2020 to 41.1 percent as of the end of August. Among subscribers in that age group, 95.1 percent chose the brokerage type. The brokerage type also dominated among those in their 40s, at 91.2 percent, and accounted for 81.9 percent among subscribers aged 50 and older.

Within brokerage-type ISAs, exchange-traded funds made up half of all assets under management. As of August, ETFs accounted for 34.21 trillion won, or 50.8 percent, of the 67.3 trillion won in brokerage-type assets. Shares followed at 24.27 trillion won, or 36.1 percent. In trust-type accounts, deposits and savings products made up 88.2 percent of assets, while funds dominated discretionary accounts at 98.8 percent.

Subscribers who opened ISAs through brokerages numbered about 9.005 million, representing 89.6 percent of the total. Bank-based subscribers stood at about 1.045 million, down about 738,000, or 41.4 percent, from roughly 1.783 million at the end of 2020.

ISA is a tax-advantaged account that allows holders to manage domestically listed shares, funds, ETFs and deposits within a single account. Tax exemptions apply to net profits — calculated by offsetting gains against losses across all products in the account — up to 2 million won for standard accounts and up to 4 million won for low-income accounts. Amounts above those thresholds are subject to a separate flat tax of 9.9 percent.

The government plans to introduce a new "productive finance" ISA to channel investment into the domestic capital market. The new account will allow annual contributions of up to 20 million won, with a lifetime cap of 200 million won, and will offer full tax exemptions on interest and dividend income. Investment will be restricted to domestic assets, but contribution limits and tax benefits will be more generous than those of the existing ISA.

Han Jae-young, head of the Korea Financial Investment Association's K-Capital Markets division, said the milestone shows that ISA has firmly established itself as the go-to personal finance account for Koreans. "Together with the productive finance ISA set to launch soon, we expect a virtuous cycle in which the account supports household asset formation while channeling funds into the domestic capital market," he said.