[DigitalToday reporter Ji-young Lee (이지영)] The Youth Future Savings, a policy finance product for young people, will be launched on June 22. An analysis says that including government contributions and tax exemptions, it can have an effect similar to a savings product with a maximum annual simple interest rate of 19.4 percent.

The Financial Services Commission said on Thursday it disclosed interest rates and preferential conditions by institution for the Youth Future Savings on the Korea Federation of Banks' consumer portal.

The Youth Future Savings is a three-year fixed-rate product. All participating institutions apply the same base rate of 5 percent a year. An additional preferential rate of up to 2 to 3 percentage points by institution is added, providing rates of as much as 7 to 8 percent a year.

Institutions offering the maximum preferential rate of 3 percentage points are NH Nonghyup Bank, Shinhan Bank, Woori Bank, Hana Bank, IBK Industrial Bank of Korea, KB Kookmin Bank and Korea Post.

Suhyup Bank, iM Bank, BNK Busan Bank, Gwangju Bank, Jeonbuk Bank, BNK Kyongnam Bank and KakaoBank offer a preferential rate of up to 2 percentage points.

Common preferential rates include 0.5 percentage point for young people with total annual salary of 36 million won or less, or comprehensive income amount of 26 million won or less, and 0.2 percentage point for those who complete "financial counseling for all young people". Institution-specific preferential rates are applied differently depending on financial transaction performance such as salary transfers, card use and automatic transfers.

The commission said that reflecting government contributions and interest income tax exemptions, the effect is similar to signing up for a simple-interest savings product yielding a maximum of 13.2 to 14.4 percent a year for the general type, and a maximum of 18.2 to 19.4 percent a year for the preferential type.

For a preferential-type subscriber receiving an 8 percent annual interest rate, the maturity payout is up to 22.55 million won. That includes principal of 18 million won plus a government contribution of 2.16 million won and interest of 2.39 million won.

The product is scheduled to be launched on June 22, and subscription applications will run for two weeks until July 3. In the first week of launch, from June 22 to 26, a five-day system based on the last digit of the birth year will apply. From June 29 to July 3, anyone can apply.

Fourteen institutions excluding Toss Bank will launch the product simultaneously on June 22. Toss Bank plans to launch it in December this year, considering its system build schedule and other factors.