The Complete Guide to the Youth Leap Account: Eligibility, Benefits, Government Contributions, and Things to Watch Out For
5 min read · · Korean original
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Hello! Today, we'll take a close look at the "Youth Leap Account," which helps young people build assets over the mid to long term. The Youth Leap Account is a financial product designed with government support to help young people save up a lump sum. It can be an especially good way to build that "first nest egg" for young people without a high income.
What is the Youth Leap Account?
The Youth Leap Account is an installment savings product that lets young people aged 19 to 34 freely deposit up to KRW 700,000 per month for 5 years. The government provides a contribution of up to KRW 33,000 per month in proportion to the amount deposited, and interest income is also tax-exempt.
Am I eligible? Who can sign up and what are the conditions?
To open a Youth Leap Account, you must meet all of the following conditions on age, personal income, household income, and comprehensive financial income taxation.
- Age: You must be between 19 and 34 years old as of the sign-up date. Up to 6 years of military service are excluded when calculating your age.
- Personal income: Your total salary for the previous tax period must be KRW 75 million or less, or your total comprehensive income must be KRW 63 million or less. However, those who have only tax-exempt income other than parental leave benefits or military pay are excluded.
- Household income: Your household income must be at or below 250% of the standard median income for your household size.
- Comprehensive financial income taxation: You must not have been subject to comprehensive financial income taxation even once in the three years preceding the tax period that includes your sign-up date.
How much can you deposit, and how much does the government contribute?
Once you've opened a Youth Leap Account, you can freely deposit anywhere from KRW 1,000 to KRW 700,000 each month. The government contribution varies depending on how much you deposit. For example, if your personal income is a total salary of KRW 24 million or less, you receive a 6.0% government contribution on monthly deposits of up to KRW 400,000.
What are the interest rates and how much interest will you earn?
Interest rates are set independently by each participating bank, with a fixed rate for the first 3 years and a variable rate for the remaining 2 years. Below are each bank's Youth Leap Account base rates and preferential rates as of 2024. Preferential rates apply only if you meet the conditions set by each bank (e.g., setting up automatic transfers, having your salary deposited, etc.).
| Bank | Base rate | Preferential rate (max) |
|---|---|---|
| NH NongHyup Bank | 4.50% | 1.00%p |
| Shinhan Bank | 4.50% | 1.00%p |
| Woori Bank | 4.50% | 1.00%p |
| Hana Bank | 4.50% | 1.00%p |
| IBK Industrial Bank of Korea | 4.50% | 1.00%p |
| KB Kookmin Bank | 4.50% | 1.00%p |
| DGB Daegu Bank | 4.00% | 1.50%p |
| BNK Busan Bank | 4.00% | 1.50%p |
| Kwangju Bank | 3.80% | 1.70%p |
| Jeonbuk Bank | 3.80% | 1.70%p |
| BNK Kyongnam Bank | 4.00% | 1.50%p |
The actual rate applied may change depending on when you sign up and each bank's internal criteria, so be sure to check the latest information in the bank's app or on its website.
On top of that, interest income on both your deposits and the government contribution is tax-exempt. Don't underestimate this tax exemption: normally, you have to pay 15.4% in tax when you receive interest or dividends. But the Youth Leap Account waives even that!
How do you sign up?
You can sign up for the Youth Leap Account through the "mobile app" of major commercial banks. Follow the 3 steps below to apply for a Youth Leap Account and start making deposits.
- Application: Each month, submit an account application online through a participating bank's app.
- Eligibility review: After you apply, the Korea Inclusive Finance Agency reviews your eligibility for about 2 weeks.
- Account opening: If you pass the review, you can open your account at the beginning of the following month.
The Youth Leap Account can be opened at major banks such as Kookmin Bank, Industrial Bank of Korea, NongHyup Bank, Shinhan Bank, Woori Bank, and Hana Bank. Since interest rates and preferential conditions may differ from bank to bank, choose the bank that suits you best when signing up
What should you watch out for?
Each person can open only one Youth Leap Account across all financial institutions. Also, if you currently hold and maintain a Youth Hope Savings account, you cannot open a Youth Leap Account. Finally, be careful: if you make a fraudulent claim using false information, the government contribution will be recovered and a penalty surcharge may be imposed.
Wrapping up
That wraps up our detailed look at the Youth Leap Account, which can help young people build their seed money, covering the basics, eligibility, how to sign up, interest rates, and more. There's a saying that once you've saved KRW 100 million in seed money, a whole new world opens up. If you don't yet have enough seed money to get started on something, making good use of the Youth Leap Account could be a great option.
