South Korea expands individual savings bond access to retirement pensions

Starting September 9, individual investors in South Korea will be able to subscribe to 10-year and 20-year individual savings bonds through retirement pension accounts. The subscription period for the first round will run from September 9 to September 15.

The Ministry of Economy and Finance has completed the construction of the necessary business system. Eligible accounts include Defined Contribution (DC) plans and Individual Retirement Pensions (IRP), while Defined Benefit (DB) plans are excluded. Initial participating financial institutions include Shinhan Bank, Hana Bank, NH Nonghyup Bank, Mirae Asset Securities, Samsung Securities, Korea Investment & Securities, KB Securities, and NH Investment & Securities. The government plans to expand participation to other institutions as they prepare for sales.

Individual savings bonds are designed for small-scale investments, with a minimum purchase of 100,000 KRW and an annual limit of 200 million KRW per person. If held until maturity, investors receive the surface interest rate plus an additional rate, calculated with annual compound interest. Using retirement pension accounts also allows for tax benefits such as tax credits and tax deferral on investment returns. However, early redemption after one year is possible but results in the loss of additional interest and compound interest benefits.