Limited to 20,000 accounts for basic livelihood recipients, near-poor and others
12-month term; monthly deposits from 50,000 won to 200,000 won
Top rate applies with consistent payments and auto-transfer enrollment
A new savings product offering an annual interest rate of up to 7.0% has been launched for financially vulnerable groups, including basic livelihood recipients. Savers can deposit up to 200,000 won ($150) per month for one year, with preferential rates available for consistent payments. The product is limited to 20,000 accounts nationwide.
The Korea Federation of Community Credit Cooperatives announced Tuesday the launch of the "Donghaeng Sarang" savings account, designed to help financially vulnerable individuals build assets.
The base interest rate is 3.3% per year. Customers who meet all preferential conditions receive an additional 3.7 percentage points, bringing the total to 7.0%. Of that bonus, 3.5 percentage points are awarded for making every scheduled monthly payment throughout the 12-month contract period. The remaining 0.2 percentage points apply when the account holder registers a personal demand deposit account at the same credit union for automatic transfer and completes at least eight of the 12 monthly payments via that auto-transfer.
Eligible applicants include basic livelihood recipients, near-poor households, people with disabilities, youth aging out of the care system, single-parent family members, and recipients of the earned income tax credit or child tax credit. The account runs for 12 months, with monthly deposits ranging from 50,000 won to 200,000 won. Each person may open only one account, and enrollment is available at branch counters of credit unions across the country.
At an inclusive finance vision ceremony held at the National Assembly in August, the federation announced plans to supply 1 trillion won ($748 million) in inclusive finance annually targeting mid- to low-credit borrowers and low-income groups, and to establish a 50 billion won support fund. The federation also signaled at the time that it would release specialized products for financially vulnerable groups.
Shin Haeng-seok, head of the federation's deposit support division, said the product was designed "to encourage a savings habit among financially vulnerable groups and help them build a stable foundation for self-reliance." Shin added that the federation would "continue to expand inclusive finance products and services that strengthen the financial resilience of vulnerable groups and realize social value."
snsd@heraldcorp.com
