[THE INVESTOR] South Koreans have poured more than 3 trillion won (US$2.67 billion) into some 2.4 million tax-efficient individual savings accounts, the country’s financial regulator said on Oct. 19.

The country introduced the ISA in mid-March to help investors here diversify their investment portfolios.

In the government-backed scheme, individuals can benefit from tax exemptions on up to 2.5 million won of capital gains from their investment held for at least five years.

“There was a total of 3.02 trillion won deposited in 2.4 million ISAs as of Oct. 14, seven months after the introduction of the product,” the Financial Services Commission said.

Compared with end-June, the number of accounts rose 1.5 percent and the deposit volume grew 22 percent, it added.

Banks had around 2.17 million ISAs, or 90.7 percent of the total, apparently taking advantage of their wide operating networks across the nation, while securities firms had 224,000.

Two types of ISAs have been offered. One is “trust-based,” which allows customers to choose specific investment products themselves. The other is “entrusting-based,” which leaves financial services firms responsible for managing assets.

The FSC said the yields of entrusting-based ISAs will be made public later this month.

(theinvestor@heraldcorp.com)