Gift Money to Kids: Use 8% Interest Savings Accounts (2026)

Working parents can strategically gift money to their children by leveraging high-interest savings accounts, like K-Bank's My Kids Savings, offering up to 8.5% annual interest. This guide details how to utilize 'periodic gift' (유기정기금) tax reporting to maximize benefits and minimize taxes for your child's future. This is not financial advice. Consult a licensed financial advisor.

How to Gift an 8.5% Interest Savings Account to Your Child

When regular payments like childcare subsidies or allowances are received, they can be considered gifts to your child if not used for their immediate expenses. By planning ahead, these funds can become a powerful tool for your child's financial future. K-Bank's 'My Kids Savings' (마이키즈 적금) account is a standout option, offering a high annual interest rate of 8.5% for five years, with flexible monthly deposits ranging from $7 to $260 (₩10,000 to ₩300,000). To start, open a 'My Kids Account' (마이키즈 통장) with K-Bank if you don't already have one, then open the 'My Kids Savings' product and begin making monthly contributions. Crucially, you'll need to file a 'periodic gift' (유기정기금) tax report. This process is simplified with basic documents like a family relationship certificate and can be completed online.

Why File a Periodic Gift Tax Report and How to Do It

Filing a 'periodic gift' (유기정기금) tax report when gifting money to your child through regular savings deposits can offer significant tax advantages. This method allows the gift to be valued at its current worth, effectively applying a discount of approximately 3% and reducing the taxable amount. For instance, a $15,000 (₩18,000,000) gift might be assessed at a lower value, allowing you to benefit from the interest earned on the full amount. The tax filing is done through the National Tax Service's HomeTax website. The recipient (your child) must log in using their own digital certificate to file the report. Navigate to the tax section, select 'General Gift Tax' and 'Periodic Reporting.' You'll need to input the first deposit date, details of the donor and recipient, and the value of the gift. For minor children, the tax exemption limit is $17,000 (₩20,000,000) over a 10-year period, meaning gifts within this limit are tax-free. Using a shared Excel template from a tax professional can simplify the creation of gift agreements and valuation statements.

What Documents Are Needed for Gift Tax Filing and Key Considerations?

To successfully file a periodic gift tax report, ensure you have the necessary documentation and follow the correct procedure. The most critical step is for the child to log in with their own digital certificate to submit the report. Required documents typically include a family relationship certificate, proof of automatic transfers from your bank account to the child's 'My Kids Account' (not just the savings account statement), a cash gift agreement, and a gift valuation statement. Capturing screenshots of the automatic transfers to the child's account is essential. A tax professional's shared Excel file can greatly assist in preparing the agreement and valuation statement. After filing, even if the calculated tax is zero, it's vital to track total gifts received over the next 10 years to stay within the $17,000 (₩20,000,000) exemption limit for minors. Tax calculations and exemption limits can vary based on individual circumstances, so consulting a tax advisor is recommended for personalized guidance.

Are There Other Financial Products for Children Besides My Kids Savings?

Beyond K-Bank's My Kids Savings, various financial products are available to help children build their future. For example, Saemaul Undong Credit Union offers the 'MG Dream Tree Savings' (MG꿈나무적금), which has previously offered high interest rates, sometimes reaching 10% annually. These accounts often provide attractive interest rates or tax benefits upon maturity, and the best choice depends on the child's age and the parents' financial situation. Additionally, consider long-term investment options like stocks or mutual funds to grow assets over time. However, investments carry the risk of principal loss, so careful consideration is necessary. Consistent financial management and education for your child are key to long-term wealth building.