Big Hit and Others' IPO Enthusiasm Cools, High-Interest Savings and Time Deposits in High Demand (Comprehensive)

Popular High-Interest Special Financial Products
Recruiting 4,000 People, Over 9,000 Daily Applicants for 5% Annual Savings Plan

[Asia Economy Reporters Sunmi Park and Minyoung Kim] As major initial public offerings (IPOs) such as SK Biopharm, Kakao Games, and Big Hit Entertainment have settled, individual investors are entrusting their money to high-interest special promotions offered by financial institutions. This is because financial companies have strategically launched a series of special term deposit and installment savings products to attract liquidity that lost its investment destination following the refund of subscription deposits. In particular, in the case of Big Hit, the refund amount from the public offering subscription reached 58 trillion won, leading financial institutions to absorb funds despite taking on 'negative margin risk.'

According to the financial sector on the 20th, NH Nonghyup Bank attracted 9,214 applicants on the first day of its special promotion event 'All One Five Installment Savings,' which offers a pre-tax annual interest rate of 5% until the 30th of this month. Among the applicants, 4,000 customers will be selected by lottery to receive the benefit of subscribing to the special installment savings, and the number of applicants in just one day far exceeded twice that number.

This installment savings product is a fixed monthly deposit of 200,000 won with a 12-month subscription period. It is a single product of fixed installment savings that offers a pre-tax annual interest rate of 5% without any other preferential conditions when automatic transfer is made on the monthly payment date, exclusively available on the mobile platform All One Bank. A Nonghyup Bank official said, "Although it is only available to All One Bank customers and subscription is possible only through a lottery after application, the 5% annual interest rate on installment savings is rare these days, so many people applied," adding, "The bank also benefits from attracting customers through high-interest savings products."

The response to K Bank's 5% annual interest rate 'Hot Deal Installment Savings' was also enthusiastic. Shortly after the first event (September 22) ended, the second event held on the 14th attracted over 5,000 applicants in just two days. This event applied a 5% annual interest rate unconditionally to 5,000 customers selected by lottery. The installment period is one year, with a monthly deposit of 300,000 won. The application speed was faster than the first event, which surpassed 5,000 applicants in six days. A K Bank official said, "The 5% annual interest Hot Deal Installment Savings sold last month received great response, leading us to plan a second event," and added, "The results of the second event exceeded those of the first."

Welcome Savings Bank launched the Welcome First Transaction Preferential Fixed Deposit, offering a 6% interest rate, from the 12th to the 16th, aiming to sell 10,000 accounts at 2,000 accounts per day. This product achieved sales of about 9,000 accounts. Due to the rapid depletion of installment savings products with interest rates exceeding 5% immediately after launch, banks such as credit unions that recently introduced high-interest installment savings products are imposing conditions such as lottery-based subscription or sales ending upon depletion. The needs of investors thirsty for high-interest products are being utilized in bank marketing efforts to attract even a single customer.

Savings Banks Also Raise Deposit Rates to Attract Customers
Top Two Both See Rapid Increase in Deposit Balances

Savings banks are also seeing significant effects in attracting funds by continuously raising deposit interest rates.

SBI Savings Bank, the largest by asset size, saw its deposit balance increase by 156.8 billion won this month alone. As of the end of last month, deposits stood at 7.0439 trillion won, surging to 7.2007 trillion won as of the 18th. SBI Savings Bank raised fixed deposit interest rates twice last month by a total of 0.30 percentage points. If subscribed online, the rate can go up to 2.0%.

During the same period, OK Savings Bank recorded a net increase in deposits of 230 billion won, with individual net deposits accounting for about 110 billion won. OK Savings Bank also raised interest rates by 0.3 percentage points this month, clearly benefiting from the rate hike. Deposits received through the non-face-to-face joint application 'SB TokTok Plus' by 67 savings banks reached 318.7 billion won by the 15th of this month. Most of these are fixed deposits with interest rates higher than those of commercial banks.

Why Are Funds Flowing into High-Interest Deposit and Installment Savings?
"Funds with No Place to Go Are Moving to Where They Can Earn Even a Little More"

The influx of money into high-interest deposit and installment savings products is due to the abundant liquidity in the market and the end of the public offering subscription boom, creating an environment where investment funds with nowhere else to go naturally gravitate toward options offering even slightly higher interest. Additionally, the refund of subscription deposits following the completion of major public offerings is considered a significant factor. During the general subscription for Big Hit's public offering held on the 5th and 6th, a total of 58.4237 trillion won in deposits was collected. Since subscribers were allocated two shares per 10 million won invested, most of the amount?about 58.2 trillion won except for 192.5 billion won of the total public offering amount?was refunded.

An industry insider said, "Investors who borrowed funds to participate in major IPOs tend to invest the refunded subscription deposits in safe products to earn returns rather than repaying loans," adding, "With the resurgence of COVID-19, economic agents' anxiety has increased, and many people are looking for places where they can lock in their money with even slightly higher interest rates if the payment burden is not too high."

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