On May 19, the Financial Services Commission provided key information regarding the National Participation Growth Fund. The fund aims to raise 6 trillion won from the general public and will be available for purchase on a first-come, first-served basis through major banks and securities firms from May 22 to June 11.
However, this is not a savings product where money is deposited monthly; instead, investors must pay the entire investment amount upfront and cannot redeem it for five years. As it does not guarantee the principal, potential investors should thoroughly understand the product's structure and risks before subscribing.
Here are some key questions and answers regarding the National Participation Growth Fund:
- When will it be available for purchase?
"Sales will begin on May 22 and continue until June 11 for a total of three weeks. The total sales amount is 6 trillion won, and since it is first-come, first-served, sales may close early if the funds are exhausted."
- Is there a separate allocation for low-income individuals?
"Yes, 1.2 trillion won, or 20% of the total sales, is reserved for low-income individuals. This allocation will be available during the first two weeks, from May 22 to June 4. Any remaining low-income allocation not sold during this period will be available to the general public in the third week."
- Can only low-income individuals subscribe during the first two weeks?
"No, the entire allocation, including the low-income portion, will be available for purchase from the start. However, the 1.2 trillion won for low-income individuals will be managed separately."
- What is the income threshold for low-income status?
"The threshold is an annual earned income of 50 million won or less. If there are other sources of income, the total income must be 38 million won or less. This is consistent with the requirements for the low-income personal comprehensive asset management account, or ISA."
- Where can individuals subscribe?
"Subscriptions can be made at 10 banks and 15 securities firms. The banks include Kookmin, KB, Nonghyup, Shinhan, IM Bank, Woori, Hana, Gyeongnam, Gwangju, and Busan banks. The securities firms include KB, NH, Daishin, Meritz, Mirae Asset, Samsung, Shin Young, Shinhan Investment, IM, Woori Investment, Yuanta, Hana, Korea Investment, Hanwha Investment, and Kiwoom Securities, which offers online-only subscriptions."
- What is the subscription limit?
"The annual subscription limit per person is 100 million won. Under the Tax Benefits Restriction Act, a dedicated account can hold up to 200 million won over five years. For a general account, the limit is 30 million won per person. The minimum subscription amount varies by sales firm, ranging from 100,000 won to 1 million won."
- What documents are needed to subscribe?
"To receive tax benefits, a certificate of income verification for ISA subscription is required. This document can be obtained from the National Tax Service's Hometax, Government24, or local tax offices. The Financial Services Commission advises obtaining this document in advance for quick subscription after the product launch. If subscribing through a general account without tax benefits, no income verification certificate is needed."
- Is it possible to invest a fixed amount monthly?
"No, the National Participation Growth Fund is not a savings-type product. Investors must pay the entire investment amount in one lump sum at the time of subscription. Additionally, redemption is not possible for five years."
- Is the principal guaranteed?
"No, it is not guaranteed. The Financial Services Commission describes this product as a high-risk investment that does not guarantee the principal, classified as a first-grade product. Investors must be assessed as having a suitable investment profile to subscribe."
- Does the government compensate for 20% of individual investment losses?
"No, the government does not directly compensate for 20% of individual investments. The 6 trillion won in public investment will be managed across 10 sub-funds, with an additional 1.2 trillion won from the government and seed investments from fund managers. In the event of losses, the government and fund managers will absorb losses before the public investment. However, this does not mean that individual investors are guaranteed a 20% loss coverage."
- What should investors be most cautious about before subscribing?
"Since sales are on a first-come, first-served basis, early closure is possible. To receive tax benefits, income verification documents must be prepared. Most importantly, investors should be aware that the product is a high-risk investment with no redemption for five years and the potential for principal loss."
* This article has been translated by AI.
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