Industrial Bank of Korea

Financial Life Guide for Foreigners 3 
Savings

End 

Sean : I am from the States.

Sofani : Hi! I am from Cambodia.

Lipei : I am from China.

All : Nice to meet you.

Sean : I worried about something.

What’s wrong? What is it about?


Sean : I have to get a place to stay, and I need to go real estate office.
I am worried about that I have to know so many things.

You have to take a good look at monthly payment and deposit especially.

Sean : Right now, I am staying in goshiwon which suffocates me. I would like to get a bigger place.

real estate broker : welcom!

Sean : Hello.

Sean : I am here to check out some studio apartments.

real estate broker : As of now, a furnished studio requires 10,000,000won for deposite and monthly payment of 500,000won, and ...

Sean : Is there any place where the deposite is cheaper?


real estate broker : Well, there is one with deposit of 5,000,000won with monthly payment of 400,000won. However, it’s not really furnished, so... The tenent has to bring own furniture and etc.

Sean : Really? then the tenent has to buy everything?

real estate broker : Yeah. 
If you buy your own things, it will at least cost about 1,000,000won.

Sean : Monthly I have to spend to get a place is really expensive in Korea, especially the deposit.

Sofani : Sean, do you have money saved?

Sean : Are you talking about savings?

Lipei : Isn’t everything same?

Sofani : From Regular savings account, you can withdraw or deposit money whenever you want. It’s what we use with regular bankbook.

Sean : It’s a common savings that ordinary people use.

Lipei : like debit card...oh~

Sofani : In case of fixed deposit, you choose the deposit period of either 1 year or two, then once the period is passed, it is closed that you withdraw all money.

Description : 
Fixed Deposit
it’s a savings that previous to the opening account, account holder choose the deposit period(useally 3 months, 6months, or a year or more) then deposit the amount. Then, he or she agrees that bank won’t return the amount within the chosen period.

Lipei : then you can’t take the money out during the period?

Sofani : You can, but if you withdraw money in the middle of the contracted period, you might lose some part of the interest you are supposed to get

Lipei : OK! I understand.

Sofani :  I explained it a lot to my Cambodian friends. But, they wouldn’t understand the concept of savings. They didn’t think they have to go to bank to save money instead of piling the money at home. But, if you would want to make large sum, even if the interest of savings, you need a fixed deposit. 



Description : 
Fixed Deposit
A savings policy where the account holder deposit certain amount of money every month for the chosen period, or deposits whenever account holder wants, the once the contracted period is over, account holder gets all savings and interest back.

Sofani : How is it like in China?

Lipei : In China, we call it Thingchichungwan. It means account holder is not able to withdraw money during the contracted period. It seems like it is same with the one in Korea.

Sofani : We have one in my country too, but we call it Kerlise sum

Sean : I have heard about it. I am just kidding. I actually never heard of it. We call it fixed installment savings account in the States. So people useally open an account for college tuition since they were really young. College tuition in the States is really expensive. It is super expensive the people deposits regularly to their savings account since they were really young.

Sofani : Without savings account, it is really difficult to save money up.

Lipei : It sounds like it.

Description : 
TIP
If you have savings account then you are less likely to spend money, and you can get the interest as well, so you can get save money easily.

Sofani : In bank, there are a lot of financial products and services they offer. It’s just like when we buy soda. there are so many different ones. Likewise, there are many different financial products regarding savings or deposits. Among many them, we have to choose what we need. We need to check out benefits fitting our situations. Like in case of Sean, If he wants to buy a place to stay. It would be great for him to have housing subscription savings.

Sean : Well, I don’t really know how long I would stay in Korea though.

Sofani : Still, the interest rate of it is higher than other products,, so it might be helpful to you
Description : 
Housing subscription savings
Savings for every housing subscription including apartment, rented place, or civilian housing and etc. Everyone can have it whether he or she has a house or not. The account holder cas deposit between 20,000won to 500,000won.

Sean : I really need to start saving money. There is another advantage of savings?

Sofani : I heard that there is depositor protection act in Korea.

Sean : What is it?

Description : 
Depositor Protection Act
If there is a situation where the financial institution cannot return the money to the customer, them Korea Deposit Insurance Corporation will reimburse under the limit of 50,000,000 won by this law.

Sean : So even if the bank is disappeared or bankrupted, the return is guaranteed?

Lipei : What if it is more than 50,000,000 won?

Sean : Don’t worry about that. Because we are super poor.

Description : 
TIP
In order to keep the money safely, deposits money to multiple banks so each one does not go over 50,000,000 won.


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