Korean youths flock to state-backed savings account

South Koreans aged between 19 and 34 rushed to open a state-backed savings account with a high yield of some 10 percent this week, with the product attracting nearly two million applicants as of Wednesday.

The state-backed savings account launched Monday -- dubbed the Youth Hope Savings Product -- is designed specifically for those aged between 19 and 34 with an annual income of or below 36 million won ($30,100). It requires applicants to submit a monthly payment of 500,000 won for a 2-year term with an annual yield of some 10 percent. The product is sold via major commercial banks here including KB Kookmin, Shinhan, Hana, Woori and NongHyup until March 4.

The rare high yield savings account is backed by 45.6 billion won worth of state budget.

The financial authorities initially set the quota at 380,000 registrants, but changed the condition to “all those aged between 19 and 34 that meet the requirements,” on Tuesday after it was found that two million applicants were seeking to set up the account.

By Jung Min-kyung (mkjung@heraldcorp.com)