In the first week of May, there was a financial product that disrupted 'mom cafes' before the golden holiday began. The MG Dream Tree Savings Account, offered by Saemaul Geumgo, is a savings product that can only be subscribed in the name of children, with an annual interest rate of around 9%. Mothers shared the list of branches selling this product and set out for an 'open run' from the morning. Naturally, the product was sold out at most branches within hours of going on sale.
Due to the tremendous popularity of the Dream Tree Savings Account, Saemaul Geumgo decided to extend the sale of this product for an additional day on the 7th. In fact, even on the first day, the number of accounts contracted exceeded the limited quantity set at 10,000, selling a remarkable 23,000 accounts. The financial institution decided to sell the product for one more day due to the much higher-than-expected popularity, and on that day, there were no limitations on the number of accounts sold.
In today's market, where the deposit interest rates of major banks are in the low 2% range, a high-interest product at 9% is exceptionally rare, even after searching through all secondary financial institutions. The eligibility for this product is restricted to children born after 2013, which has led to skyrocketing popularity centered around mom cafes. The maximum monthly payment limit is 200,000 won, with a one-year maturity.
Saemaul Geumgo is selling this high-interest product specifically for new child customers. To take advantage of this savings product, a demand deposit account in a child's name must be opened, and funds must be deposited into that account before being transferred to the savings product account. Thus, while selling the savings product, Saemaul Geumgo can effectively attract a large number of child customers.
Moreover, demand deposit accounts are low-cost deposits. Since these are deposits that banks can procure at low interest rates, they can increase their receiving balances while reducing costs associated with deposit interest. With nearly 20,000 accounts sold in just two days, if it is expected that 30,000 accounts will be sold by the 7th, the receiving balance that Saemaul Geumgo could obtain from this Dream Tree Savings Account is estimated at 6 billion won monthly, totaling 720 billion won over a year.
Although concerns may arise regarding the interest expenses of failing geumgos despite the high interest rate, Saemaul Geumgo explained that the interest expenses borne by local geumgos are around the rate of regular savings. The Dream Tree Savings Account applies a preferential interest rate of 6.0% on top of the basic 1-year regular savings interest rate per geumgo. Thus, while the basic interest expense is borne by each geumgo, the 6% preferential interest rate is covered by the Saemaul Geumgo Central Association, alleviating concerns about the soundness of failing geumgos.
A Saemaul Geumgo official noted, "We intended to end sales due to reaching the sales limit, but decided to extend sales for one more day given the positive response from customers," adding, "We will continue to make efforts to provide a variety of financial experiences and benefits to child customers, who are the future of Saemaul Geumgo."