Commercial Banks Align Deposit Rates... Hana Bank Raises Non-Face-to-Face Fixed Deposit Rates (Comprehensive)

Hana Bank Non-Face-to-Face Fixed Deposit 0.8%
Shinhan Bank 0.9%, Kookmin Bank 0.7%

[Asia Economy Reporter Kim Min-young] Hana Bank recently raised the interest rates on its non-face-to-face fixed deposit products, aligning its rates with other banks. This move comes after the Bank of Korea's big cut (a significant interest rate reduction), which led Hana Bank to lower rates by 0.5 percentage points, but the bank judged that the excessive cut weakened its competitiveness in interest rates.

According to the financial sector on the 6th, Hana Bank raised the interest rate on its 'Hana One Q Fixed Deposit' from 0.60% to 0.80%, an increase of 0.20 percentage points, on the 29th of last month. This product is a one-year maturity deposit available through the mobile banking application (app) Hana One Q.

Following the Bank of Korea's big cut, the rate was lowered from 1.10% to 0.60% on the 1st of last month, a 0.50 percentage point decrease, but less than a month later, it reversed to an increase. Hana Bank stated, "The rate was raised to support customers using non-face-to-face product channels due to the novel coronavirus infection (COVID-19)."

In the financial sector, this rate hike by Hana Bank is interpreted as a strategic move to retain existing customers. Since March, other major banks have lowered their non-face-to-face fixed deposit rates by 0.20 to 0.45 percentage points, which is a smaller reduction compared to Hana Bank.

Shinhan Bank lowered the interest rate on its 'SOL Convenient Fixed Deposit' from 1.35% to 1.10% on March 11, and then further reduced it to 0.90% on the 16th of last month.

Woori Bank also lowered the interest rate on its 'WON Deposit' by 0.10 percentage points each in March and April, and the 'Wonmoa Deposit' rate was reduced by 0.45 percentage points over two occasions. Kookmin Bank and NongHyup Bank lowered their non-face-to-face product rates by 0.20 percentage points and 0.30 percentage points, respectively.

Deposit interest rates are most influenced by the base interest rate but can be partially determined autonomously by banks. According to the Korea Federation of Banks, deposit interest rates are decided comprehensively considering the base rate, the bank's fund holding status, management policies such as marketing strategies, and financial market conditions.

In the secondary financial sector, the 'game of nerves' over deposit interest rates is also in full swing. SBI Savings Bank, the industry leader in asset size, raised its one-year fixed deposit interest rate by 0.30 percentage points to offer 2.00%. If customers subscribe through this savings bank's mobile banking app, 'Cider Bank,' they receive an additional 0.10 percentage points, giving a maximum rate of 2.10%. Not to be outdone, OK Savings Bank, the industry's second largest, also raised its 'OK Safe Fixed Deposit' rate from 1.90% to 2.10%.

A financial sector official said, "Customers who lock their lump sums in fixed deposits are very sensitive to interest rates and may switch financial institutions even if there is only a 0.10 percentage point difference," adding, "After the base rate cut, major banks lowered deposit rates, but they are anxious about losing existing customers."

This content was produced with the assistance of AI translation services.