The Financial Services Commission will begin selling the second National Participation Growth Fund, worth 600 billion won, starting September 30. Participants in the first fund will not be eligible to invest in the second fund, which allocates 300 billion won, or half of the total amount, specifically for low-income households.
On September 22, the Financial Services Commission announced the details of the second National Participation Growth Fund launch.
The second fund will be available for purchase from September 30 to October 15, over a period of 10 business days. It will close early if all available shares are sold out. The first fund, launched in May, sold out quickly, prompting the creation of this additional opportunity. However, to provide more investors with a chance to participate, those who invested in the first fund will be restricted from joining the second fund.
Notably, during the first five business days of sales, from September 30 to October 7, 300 billion won, or 50% of the total amount, will be allocated for low-income households. This is a significant increase from the 20% allocation in the first fund. The criteria for low-income households are defined as having earned income of 50 million won or less, and for those with other sources of income, a total income of 38 million won or less. After October 8, the remaining shares will be sold without distinction between low-income and general investors.
The process for signing up has also been improved. In the first sale, participants had to obtain and submit an income verification certificate for Individual Savings Accounts (ISAs) themselves. Starting with the second fund, financial companies will be able to verify income information with the consent of participants using public data and scraping technology.
Investors can benefit from a maximum income deduction of 40% and a separate taxation rate of 9.9% on dividend income, depending on the investment amount. The income deduction rates are 40% for investments up to 30 million won, 20% for investments between 30 million and 50 million won, and 10% for investments between 50 million and 70 million won. However, investors who have been subject to comprehensive taxation on financial income at least once between 2023 and 2025 will not be eligible for these tax benefits.
The fund can be subscribed to at 10 banks, including NongHyup, Shinhan, IM Bank, Woori, Hana, Gyeongnam, Gwangju, and Busan banks, as well as 14 securities firms. The annual subscription limit per person is 100 million won, and a total of 200 million won can be invested over five years in a dedicated account.
The National Participation Growth Fund is a high-risk product that does not guarantee the principal. It has a maturity of five years, with restrictions on early redemption. After 90 days from the fund's establishment, it can be transferred on the exchange. However, if transferred within three years of investment, the amount of tax benefits received may be reclaimed.
* This article has been translated by AI.
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