Employees Can Now Apply Directly... KOSME Accelerates Expansion of Preferential Savings Deduction Participation

Introduction of Employee-Centered Application Process

The Korea SMEs and Startups Agency (KOSME) announced on April 1 that it will improve the application process for the “Preferential Savings Deduction for SME Employees” program, which supports asset formation for employees of small and medium-sized enterprises (SMEs), in order to enhance accessibility.

The “Preferential Savings Deduction for SME Employees” is a policy-based financial product designed to support asset formation and long-term employment among SME workers, operated in cooperation with the Ministry of SMEs and Startups, KOSME, and financial institutions. Under this program, if an employee saves between 100,000 and 500,000 won per month, the company will contribute an additional 20% of the employee's monthly deposit, and participating banks will offer a preferential interest rate of up to 4.5%. For example, if an employee saves 500,000 won every month, upon maturity in five years, the employee will receive approximately 39.8 million won in principal and interest (assuming a 4.5% interest rate).

Jungjinkong Headquarters, Jinju City, Gyeongnam Province

Previously, the company-centered enrollment procedure limited voluntary participation by employees. However, with the newly improved system allowing employees to apply directly, accessibility is expected to increase significantly. In particular, considering that employees often found it difficult to encourage their companies to participate even if they wanted to enroll, KOSME will now provide guidance to companies and encourage their participation whenever an employee applies.

Applications can be made through the Preferential Savings Deduction website or via the applications of partner banks (IBK Industrial Bank of Korea, Hana Bank, KB Kookmin Bank, and NH NongHyup Bank). Through this improvement, KOSME aims to lower the barrier for employee participation, expand corporate involvement, enhance the effectiveness of the program, and continuously broaden the foundation for Preferential Savings Deduction enrollment.

Sukkyoon Kang, President of KOSME, stated, “The significance of this improvement lies in shifting the enrollment structure from a company-centered to an employee-centered approach, thereby broadening the base for participation. We will continue to expand support for long-term retention and asset building among SME employees by operating the program in line with on-site needs.”

This content was produced with the assistance of AI translation services.