(image: Flickr/ Republic of Korea Armed Forces)
SEOUL, Aug. 3 (Korea Bizwire) — After a steep rise in the monthly salary of enlisted soldiers, most servicemen were found to have been preparing for their future by saving rather than increasing their consumption at the military commissary.
According to the Ministry of Defense, a corporal’s salary was increased from 195,000 won to 366,200 won in January of this year, an 88 percent increase.
After analyzing soldiers’ spending patterns over a period of six months, the ministry found that 33,875 new bank savings accounts were created per month on average in the first half of the year, which was a 42.9 percent increase from the same period last year when only 23,705 new accounts were opened.
Typical savings plans allow subscribers to set aside money each month on an installment basis.
During the same period, there was a monthly average of 30,707 new subscribers for savings accounts that allowed for a maximum of 100,000 won in monthly contributions, a 74.7 percent increase from the same period last year, when there were 17,578 new subscribers.
The savings plan capped at 100,000 won per month provides high interest rates of 5 percent per annum and is exclusive to enlisted servicemen.
The ministry stated that aside from the minimum funds needed for soldiers to carry out their military careers, the rest of the money is generally put into savings accounts by the soldiers.
For Army Pfc. Kang Sang-min, who works near the northern border, despite the 100,000 won monthly installment payments sent to his savings account after the salary increase, his military life has become less strained, as he is now able to make more purchases at the commissary without help from his parents.
Army Cpl. Lee Don-wuk, who works alongside Kang, said that he has increased his deposits into his savings account as he is saving up to pay for university after leaving the army.
To cater to such money-conscious servicemen, the military plans to launch a new savings plan that would still provide the same 5 percent interest rate but with an increased monthly maximum of 200,000 won.
Meanwhile, soldiers spent a monthly average of 6,536 won at the military commissary in the first quarter of this year, a 19.7 percent increase from the 5,461 won spent in the same period last year.
H. S. Seo (hsseo@koreabizwire.com)
