Ufam Program for Deposit Protection in Turkey

Definition of the YUVAM Account for Deposit Protection in Turkey

The Turkish lira exchange rate has faced many fluctuations, which naturally led to a loss of confidence in the lira as a means of saving, prompting citizens and savers to convert their savings to other foreign currencies.

In response to this concern, and to encourage savers to increase confidence in the local currency, the Turkish government introduced the YUVAM protected deposit system, which was warmly welcomed by Turks and others for its fruitful idea that directly benefits savers.

What is the YUVAM Account?

It is a financial system imposed by the Central Bank of Turkey to protect depositors' funds, ensuring the preservation of their capital deposited in Turkish lira against exchange rate fluctuations in the currency market. It allows them to benefit from protection against exchange rate differences for their saved money, in addition to the profit revenues they receive at the end of the maturity period, with a minimum of 3% of the amount annually.

The (YUVAM) program is an economic initiative aimed at encouraging saving in lira in Turkish banks, and is designed for foreigners and expatriate Turks, both companies and individuals.

Turkey launched this financial system in February 2022, guaranteeing lira depositors protection from exchange rate fluctuations and the announced interest rate, plus the difference in the exchange rate between the time of deposit and withdrawal.

How does the YUVAM Account guarantee deposits in Turkey?

The Turkish government recently launched a website that clarifies all the ambiguous points about YUVAM YUVAM and provides visitors with access to videos, brochures, all legal details and information, as well as profit calculators and general answers to questions and inquiries.

The YUVAM Account allows non-resident Turks and their companies abroad, as well as foreigners residing in Turkey, to invest their savings in Turkish lira in a Turkish bank. The Central Bank then provides YUVAM accounts with a guaranteed additional return, in addition to protection against exchange rate fluctuations between the time of deposit and withdrawal.

Advantages of the YUVAM Account

1. Flexibility in the deposit method is among its most important features, which will be explained in the next section of this article.
2. There is no upper or lower limit to the amount you can deposit in a YUVAM Account.
3. You can open a YUVAM Account at any time according to a mechanism that clearly determines the exchange rate.
4. The Central Bank guarantees the protection of your savings and your additional return from exchange rate fluctuations.
5. Contributing to the country's economy, as your savings in YUVAM accounts support the Turkish economy.
6. YUVAM provides an additional return at the time of maturity of the deposited amounts.
7. You are not required to pay transfer fees in Turkey for transferring your foreign currency from abroad.
8. You can convert your accounts in US dollars, euros, British pounds, and Swiss francs to a YUVAM Account.
9. You can open multiple accounts whenever you want.

Who is eligible to open a YUVAM Account? Is it allowed for foreigners?

As mentioned earlier, foreigners and non-resident Turks who meet any of the following conditions can open a YUVAM Account through any Turkish bank participating in this program, including:

1. Turkish citizens who have residency, a work permit, or the right to work abroad.
2. Turkish citizens whose residence is registered as a foreign address in Turkey.
3. Non-Turks residing abroad and holding the blue card granted to investors...
4. Foreign natural and legal persons eligible to open an account in a Turkish bank.
5. Additionally, companies whose owners are non-residents, established in a foreign country according to the laws of that country, and whose legal residence is outside Turkey.

How to Open a YUVAM Account in Turkey

Anyone who has a bank account in a Turkish bank can immediately open a participation account in Turkish lira through mobile banking applications, without the need to visit the bank branch where they have an account.

This can be seen through the Kuveyt Turk Bank application, for example, from the accounts list, then the YUVAM participation account in Turkish lira.

After that, you can enter the next menu, where you must choose the specified term for the transaction (3 months, 6 months, or a full year), enter the account name of your choice, and read and agree to the terms of the agreement.

In the final step, you specify the amount you want to allocate to this fund as follows:

The steps and terms may vary depending on the bank and its mobile application.

This transaction can also be done through online banking devices or any bank branch near you.

What are the annual profits of the YUVAM Account?

YUVAM accounts receive an additional return payable by the Turkish Central Bank at different rates, depending on the maturity date of the amounts converted from foreign currency, according to the chosen deposit period:

1. 1% annual return for a deposit with a 3-month term
2. 2% annual return for a deposit with a 6-month term
3. 3% annual return for a deposit with a 12-month term
4. 4% annual return for a deposit with a 24-month term

This is in addition to the difference between the deposit and exchange rates.

For example, if a YUVAM account is opened with $1,000 for a 12-month maturity period, the return rate is 3%. At the end of the maturity, the account holder is guaranteed to receive the equivalent of $1,030, in addition to the profit or interest distribution determined by the bank, plus the exchange rate difference, which is covered by the Turkish Central Bank.

Edited by: Imtilak Real Estate©