Korea group offers up to 12% annual savings interest to boost births
Korea Federation of Community Credit Cooperatives Director Cho Bong-eop (2-L) poses with the first customer of its new savings product offering an annual interest rate of up to 12% at the organization’s office in Seoul on Friday. Photo by Korea Federation of Community Credit Cooperatives
SEOUL, April 10 (UPI) — The Korea Federation of Community Credit Cooperatives said Friday it launched a savings product that offers an annual interest rate of up to 12% in an attempt to boost childbirth.
The one-year installment savings product provides a base rate of 4%, which increases by steps to 12% depending on the number of the customer’s children. It is subject to a deposit limit, though.
For savers with a newborn in areas experiencing population decline, the country’s top apex organization said that the maximum 12% interest would be guaranteed regardless of the number of children.
“We have introduced dedicated financial products every year since 2023 in an effort to help address the low birth rate,” cooperative Director Cho Bong-eop said in a statement.
“As a community-based financial institution, we will keep fulfilling our social responsibilities by supporting vulnerable groups and revitalizing local economies, in addition to tackling the low birth rate,” he added.
South Korea has one of the world’s lowest fertility rates, which fell to 0.72 in 2023, according to Statistics Korea. The figure rebounded slightly to 0.75 in 2024 and 0.8 last year, still far below the replacement level of 2.1.
This means that for every 100 South Korean women, only 80 babies are expected to be born over their lifetimes, leading to a gradual population decline. The country’s population stands at 51.6 million.
To address the challenge, the Seoul government has funneled a huge amount of money over the past decades to little avail. In recent years, even private companies stepped in, providing bonuses and various benefits to employees who have a baby.
Last month, Statistics Korea reported nearly 27,000 births in January, the highest monthly figure in nearly seven years. However, the fertility rate still remained below 1.