Of the brokerage cash management accounts (CMA) sold in Korea, only the jonggeum (merchant bank) type is covered by deposit insurance. RP-type and issued-note-type CMAs sit outside the scheme altogether, regardless of the fact that the protection cap rose from 50 million won to 100 million won on 1 September 2025. The Korea Deposit Insurance Corporation's list of covered products names only investor deposits at securities firms as protected, and classifies brokerage CMAs and RPs as non-covered.
That does not make RP-type or issued-note accounts dangerous. It means the safeguard sits somewhere other than deposit insurance. What differs by type is where your money actually goes and who is on the hook to pay it back. When choosing a parking account, that structure matters more than the second decimal place of the rate.
The dividing line is where the money goes
A CMA is not a single product but an account with an automatic sweep attached. The name follows whatever the swept cash is invested in.
The RP type places funds in repurchase agreements collateralised by government bonds and other high-grade paper the brokerage holds. The firm sells the bond with a promise to buy it back on a set date, so even if the brokerage fails, the pledged collateral remains. The issued-note type works differently. Mirae Asset Securities' product disclosure describes it as an instrument where the issuing company pays principal and interest, with terms set by that company's credit rating. In other words, the issuer's credit, not collateral, is what backs repayment. Only a handful of firms licensed as mega investment banks — those with at least 4 trillion won in equity capital — may issue these notes.
The jonggeum type is a cash management account run under a merchant banking licence. Its return structure resembles the issued-note type, but merchant bank notes and CMAs fall inside the deposit insurance perimeter, protected up to 100 million won. The MMF type is a different animal entirely: a fund investing in short-term government bonds and commercial paper, so the return floats with performance rather than being fixed, with neither principal guarantee nor deposit insurance.
| Type | Where the cash goes | Who repays | Deposit insurance | Return |
|---|---|---|---|---|
| RP type | Government and high-grade bonds (repo) | Brokerage, backed by pledged collateral | Not covered | Fixed contractual rate |
| Issued-note type | Notes issued on the brokerage's own credit | The issuing brokerage | Not covered | Fixed contractual rate |
| Jonggeum type | Merchant bank cash management account | The merchant bank | Up to 100 million won | Fixed contractual rate |
| MMF type | Fund of short-term bonds and CP | Nobody — tied to fund performance | Not covered | Variable, performance-based |
How far does the raised 100 million won cap reach?
The increase was the first in 24 years. The government raised the cap from 50 million to 100 million won effective 1 September 2025, applying it not only to banks and savings banks but to the mutual finance sector — credit unions, Nonghyup, Suhyup, forestry cooperatives and Saemaul Geumgo. Retirement pensions, pension savings and insurance claim proceeds moved up with it. The change applies automatically regardless of when the account was opened; no application is needed.
Two points are easy to miss. First, the cap is calculated per financial institution. All deposits at one company are added together against a single 100 million won limit, while splitting across companies gives you 100 million won at each. Second, protected interest is computed at the lower of the contracted rate or a rate set by the KDIC. Filling the cap to the brim can push the interest portion outside protection.
At a brokerage the line is sharper still. Investor deposits parked for trading are covered; the moment that cash is swept into a CMA arrangement, it drops out of coverage. Within a single account, the status of the money decides its character.
The cap doubling and your product qualifying for that cap are two entirely separate questions.
What a one-point rate gap is worth after tax on 100 million won
On coverage alone the jonggeum type looks best, but the real choice has to account for the rate. Rates compiled by the Korea Economic Daily at the end of December 2025 for CMAs and issued notes put RP-type CMAs at up to 2.50% a year on balances under 10 million won, while one-year issued notes ran 3.05% to 3.45%. Both rest on the same brokerage's credit, yet the gap between the instant-access CMA and the term-locked note runs to roughly one percentage point.
Interest income is withheld at 15.4% — 14% income tax plus 1.4% local income tax. Running 100 million won for one year produces the following after-tax figures.
| Annual rate (%) | Pre-tax interest (10k won) | Tax at 15.4% (10k won) | After-tax interest (10k won) | Effective after-tax yield (%) |
|---|---|---|---|---|
| 2.00 | 200.0 | 30.8 | 169.2 | 1.692 |
| 2.40 | 240.0 | 36.96 | 203.04 | 2.030 |
| 2.50 | 250.0 | 38.5 | 211.5 | 2.115 |
| 3.05 | 305.0 | 46.97 | 258.03 | 2.580 |
| 3.45 | 345.0 | 53.13 | 291.87 | 2.919 |
The after-tax gap between 2.00% and 3.05% is 888,300 won. Across the wider 1.45-point spread from 2.00% to 3.45%, it reaches 1,226,700 won. Read the other way: chasing an extra 0.1 percentage point on money you will spend within days is a decision worth 84,600 won a year on 100 million won, and less on smaller balances. As with bonds whose identical pre-tax yields diverge after tax, parking products are better compared on the post-tax number than the headline rate.
If there is no insurance, how does the money come back?
Non-covered does not mean total loss. It means the recovery route runs through something other than the KDIC. The RP type recovers by disposing of pledged collateral, so unless that collateral itself sours, there is something to claim against. That is precisely why eligible collateral is limited to government bonds and paper rated A or above.
The issued-note type has no collateral. The issuing brokerage's credit is the repayment capacity, so if the firm fails you join the recovery process as an ordinary creditor. Restricting the issuance licence to large firms with at least 4 trillion won of equity capital is best read as a regulatory narrowing of that risk. The MMF type is different again: it carries not credit risk but the price volatility of its holdings, so a sharp rate spike can push the net asset value briefly below par.
The three carry different kinds of risk — collateral impairment, issuer bankruptcy, and market price movement. Deposit insurance blocks none of them. That is why splitting accounts by the purpose of the funds is so often recommended, and if tax-advantaged accounts are in the mix, the difference in investable scope between brokerage-type and trust-type ISAs belongs in the same comparison.
What to watch
- The type label on the account opening screen — RP, issued-note, jonggeum or MMF — and whether the disclosure's deposit insurance field reads "not applicable"
- Whether deposits plus a jonggeum CMA at one company exceed 100 million won combined; the cap is per institution
- The spread between instant-access and term products — decide whether the money can be locked up before comparing rates
- The figure after 15.4% withholding rather than the headline rate; on small balances a 0.1-point gap is trivial even annualised
- For issued-note types, the issuing brokerage's credit rating; for RP types, the rating floor on eligible collateral
- That MMF types carry no fixed rate — the displayed yield is a past result
Sources
- Deposit protection cap raised from 50 million to 100 million won from 1 September — Korea Policy Briefing
- Deposit Protection System FAQ — Korea Deposit Insurance Corporation
- Issued-note CMA disclosure — Mirae Asset Securities
- For short-term cash, a CMA; for higher rates, issued notes — Korea Economic Daily