With 500,000 won a month, which is better: installment savings or an ETF?
I'm early in my career, and I have about 500,000 won left over each month, so I'm thinking of starting to save now.
My parents say I should definitely choose installment savings, but looking at interest rates these days, I wonder if it's really that attractive. There's also a lot of talk that it's better to consistently buy index ETFs.
I'm a conservative investor, and I plan to use the money for a jeonse deposit in three years. Given these conditions, is installment savings just the obvious answer?
5 answers
If you're going to spend the money in 3 years, just put it in a savings account—no need to overthink it. I think ETFs should be held for at least 5 years.
Where did you see the claim that index ETFs are better? Please share a source. That's usually based on a long-term horizon of 10+ years, so it doesn't apply to a 3-year timeframe.
When I was just starting out in my career, I went all-in on ETFs with 400,000 won a month, and a year and a half later I was down 22%. I missed the timing for a jeonse lease and ended up borrowing money. I really couldn't sleep at night back then. If it's supposed to be safe and it's money you'll need in three years, stocks are absolutely not the right choice. You'd be better off comparing interest rates on installment savings and parking accounts and switching between them.