What is YUVAM Account and How Can I Benefit?

Understanding the YUVAM Account

The YUVAM account is a specialized savings mechanism introduced by the Central Bank of the Republic of Turkey (CBRT). It encourages non-residents to bring foreign currency into the Turkish banking system. This account converts foreign currency into Turkish Lira (TRY) while providing a guarantee against exchange rate fluctuations. It also offers an additional return on top of the standard interest or profit share.

Who is Eligible to Open a YUVAM Account?

Eligibility for a YUVAM account extends to several groups of individuals and entities. You can open this account if you meet one of the following criteria:

Individual Eligibility

• Turkish citizens who reside abroad and hold a valid residence or work permit.
• Blue Card holders (former Turkish citizens who gave up citizenship by permission).
• Foreign individuals who meet the banking regulations for opening an account in Turkey.

Corporate Eligibility

Foreign companies and legal entities can also open YUVAM accounts. This allows international businesses to manage their capital while benefiting from the Turkish banking system's incentives.

How the YUVAM Account Works

When you open a YUVAM account, you deposit funds in specific foreign currencies. These include US Dollars (USD), Euros (EUR), British Pounds (GBP), or Swiss Francs (CHF). The bank converts these funds into Turkish Lira at the Central Bank's current buying rate. At the end of the term, the bank evaluates the exchange rate. If the Lira has depreciated, the Central Bank covers the difference to ensure your original foreign currency value is protected.

Maturity Periods and Extra Returns

The YUVAM account offers different maturity options. The Central Bank provides an "additional return" based on how long you keep your money in the account. These rates are fixed and paid in Turkish Lira at the end of the term:

• 3 Months: 3% additional return per annum.
• 6 Months: 4% additional return per annum.
• 12 Months: 5% additional return per annum.
• 24 Months: 6% additional return per annum.

For the 24-month option, interest or profit share payments are typically made annually.

Key Benefits of YUVAM Accounts

The YUVAM account is designed to be a low-risk, high-yield investment for non-residents. Key advantages include:

• Exchange Rate Protection: You are shielded from the risk of the Turkish Lira losing value against your original currency.
• Guaranteed Principal: Your initial deposit is safe. You will receive at least the equivalent of your original foreign currency amount.
• Tax-Free Earnings: Income earned from YUVAM accounts is currently exempt from withholding tax in Turkey.
• No Investment Limits: There is no maximum limit on the amount you can deposit or the number of accounts you can open.

Calculating Your Earnings: A Practical Example

Imagine you deposit 10,000 EUR into a 12-month YUVAM account. The bank converts this to Turkish Lira. At the end of the year, two things happen:

1. The bank pays you the standard interest rate agreed upon at the start.
2. The Central Bank pays you an additional 5% return.

If the Euro has gained value against the Lira during that year, the Central Bank also pays you the exchange rate difference. You are guaranteed to receive the Turkish Lira equivalent of 10,500 EUR (your principal plus the 5% extra return) plus the bank's interest. If the Lira gains value, you still receive your principal and the extra returns in Lira, which would then be worth more in Euro terms.

Early Withdrawal and Closing the Account

You can withdraw your money before the maturity date. However, doing so results in the loss of specific benefits. If you close the account early, the Central Bank will not pay the additional return or the exchange rate difference. You will only receive the balance based on the exchange rate at the time of withdrawal, which may be lower than your initial deposit in foreign currency terms.

Using YUVAM for Turkish Citizenship by Investment

Foreigners seeking Turkish citizenship through the $500,000 bank deposit route can use YUVAM accounts. The law requires you to keep the investment for three years. Since the maximum term for a YUVAM account is 24 months, you must renew the account to complete the 36-month requirement. You can renew the account for another 12 months after the initial 24-month term ends. This allows you to earn extra returns while fulfilling the legal requirements for citizenship.

How to Open a YUVAM Account

Most major Turkish banks and participation (Islamic) banks offer YUVAM accounts. If you already have a bank account in Turkey, you can usually open a YUVAM account through mobile or internet banking. If you do not have an account, you can open one remotely by providing the necessary identification and residency documents to your chosen Turkish bank.

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