According to the Financial Services Commission, subscribers wishing to switch from a Youth Leap Account to a Youth Future Savings account must not voluntarily terminate their existing account first. Violating this order will result in the official conversion procedure not being recognized, making the switch application itself impossible.

To successfully switch, subscribers must follow the prescribed procedure. The first step of the switch is to apply for the Youth Future Savings. Applicants do not pre-select between the general and preferred types; instead, they undergo an eligibility screening based on income, household income, and employment status at a small or medium-sized enterprise. Based on the screening results, they are automatically classified as either a general or preferred type. After receiving a notification of eligibility, they must open a Youth Future Savings account at a handling financial institution. The existing Youth Leap Account can only be terminated through a 'linked subscription special early termination' after the new account has been fully opened.

The two products cannot be maintained simultaneously. However, if the Youth Leap Account is terminated through a regular cancellation on the grounds of duplicate enrollment, the subscriber will be excluded from the switch. This is because this transfer system is not a general method of voluntarily terminating an existing product and then subscribing to a new savings account, but rather a special procedure that links and processes the two policy-based products.

Additionally, subscribers should note that the funds in the Youth Leap Account are not automatically transferred to the Youth Future Savings account. The amount received from the special early termination must be managed separately, and new deposits must be made to the Youth Future Savings account within a maximum range of 500,000 won per month.

Youth Future Savings: Effective Returns Reach Up to 19.4% Annually

The Youth Future Savings is a policy-based financial product for young people aged 19 to 34 (with up to six years of military service added to the age calculation) that allows them to freely deposit up to 500,000 won per month for three years. According to the Korea Inclusive Finance Agency, the applicable type varies based on personal and household income, and employment at a small or medium-sized enterprise or small business owner status. The government contribution is 6% of the deposit amount for the general type and 12% for the preferred type. Tax exemption benefits on interest income are also provided.

According to the product structure announced by the Financial Services Commission, the base interest rate is 5% annually. When including preferential interest rates offered by individual financial institutions, the rate goes up to approximately 7–8% annually. When the government contributions and tax exemption benefits are converted into a simple-interest savings rate, the effective return is presented as 13.2–14.4% annually for the general type and 18.2–19.4% for the preferred type.

Beware of Screening Errors for the 'Preferred Type'… Hasty Termination is Prohibited

It is safest not to rush the decision to switch based solely on a preferred type determination. This is because there have been recent cases where the screening results for some subscribers were corrected from the preferred type to the general type.

Cookie News reported that some applicants, trusting the initial notification that they were eligible for the preferred type, opened a Youth Future Savings account and then specially terminated their Youth Leap Account. However, they later received a correction notice to the general type due to a screening error. Despite following the order prescribed by the system, they faced a situation where the government contribution rate was reduced from 12% to 6%.

According to the Daily Economic News (Newdaily), the Korea Inclusive Finance Agency explained that the screening results were re-verified because information about some companies was inaccurately reflected. In this regard, they stated that they would support a relief procedure for those who had already completed the linked subscription special early termination, allowing them to cancel the termination and maintain their existing accounts.

However, this relief procedure does not apply uniformly to all voluntary termination cases. As it is a measure for specific subscribers who suffered losses due to the screening corrections, individuals must directly check their termination method and processing status with the Korea Inclusive Finance Agency or their handling bank.

In particular, for subscribers who have maintained their Youth Leap Account for a long time, it is necessary to carefully compare the benefits of the existing account until maturity with the applicable type of the Youth Future Savings and the remaining depositable amount. A switch is not unconditionally advantageous for all subscribers simply because the Youth Future Savings has a shorter maturity or offers higher preferred contributions.

In conclusion, the order that a subscriber hoping to switch must follow is: 'Apply for the Youth Future Savings and undergo screening → Receive notification of eligibility → Open a Youth Future Savings account → Perform a special early termination for the linked subscription of the existing Youth Leap Account.' It is most important not to arbitrarily terminate the existing account before confirming the official account opening and conversion instructions.

[The subscription conditions, government contributions, and conversion eligibility for financial products may vary depending on individual income and account status. Before terminating an existing account, you must verify your conversion eligibility and procedures with the Korea Inclusive Finance Agency or the handling financial institution. This article was written with AI assistance.]