Bank Interest Rates in the 10% Range... If You Look Closely, There's a 'Daebak' Opportunity [Practical Finance]

Base Rate Hike, Special Promotion Products Follow
Shocking Benefits with Double-Digit Interest Rates
Carefully Review Preferential Interest Rate Conditions

[Asia Economy Reporter Kiho Sung] High-interest savings and time deposit products, which had disappeared due to prolonged ultra-low interest rates, are being launched one after another. As interest in high-interest special products rises following the base rate hike, banks are focusing on related products to attract customers. Additionally, with the launch of Toss Bank and other internet-only banks expanding aggressive marketing activities, interest rate competition among banks is becoming even fiercer. However, most high-interest special products come with conditions such as preferential interest rates, so it is advised to examine them carefully.

Savings banks are leading the way in offering savings and time deposit products with exceptional benefits. Woori Comprehensive Financial has launched the ‘High Fixed Deposit Savings’ offering up to 10% annual interest. The base interest rate is 2.0% per year, but new customers receive a 4 percentage point preferential rate. Additionally, customers who agree to marketing communications get an extra 1 percentage point, and up to 3 percentage points more are provided based on the average balance of the ‘CMA Note’. Maintaining 1 million KRW in the CMA until the maturity of the savings account yields an additional 2%, maintaining between 1 million and less than 5 million KRW yields 2.5%, and maintaining over 5 million KRW yields 3%. The CMA is a performance-based financial product where deposits are invested in bills or bonds, and the returns are passed on to customers; it is mainly used as a demand deposit account at comprehensive financial companies. This product is available to individual customers through Woori Comprehensive Financial’s smart banking app. The maturity period is 12 months, with monthly deposits ranging from 10,000 to 100,000 KRW.

The National Credit Union Federation of Korea introduced the ‘Plus Fixed Deposit Savings’ (linked with Hyundai Card), a high-interest product offering up to 7% annually. When issuing a Hyundai Card affiliated with the credit union, a base interest rate of 2.0% is given, and meeting card usage and automatic transfer conditions applies a total preferential interest rate of 5.0%. Customers can subscribe for up to 300,000 KRW per month with a 1-year maturity.

DB Savings Bank launched the ‘Dream Big Fixed Deposit Savings’ boasting an interest rate exceeding 6%. It offers a total interest rate of 6.9%, combining a base rate of 3.1% and a preferential rate of 3.8%. However, to receive the preferential rate, customers must subscribe to and maintain DB Insurance’s direct internet auto insurance from the time of subscription until 30 days before maturity.

SBI Savings Bank raised its fixed deposit interest rates by 0.3 percentage points starting from the 3rd of this month, offering up to 2.6% interest for 1-year maturity products. Following this, Welcome Savings Bank also increased fixed deposit interest rates by 0.2 to 0.25 percentage points from the 7th. The 1-year maturity product now offers up to 2.6%, and the 2-year product up to 2.65% interest.

Among commercial banks, Shinhan Bank is running the third phase of the ‘Hey Young Special Interest Rate’ event, offering a special interest rate of 5.5% annually on the ‘Shinhan My Home Savings’ for customers aged 29 or younger who have not subscribed to the Housing Subscription Savings. Hey Young customers (born after 1991) who newly subscribe to ‘Shinhan My Home Savings’ receive an additional event preferential interest rate of 3.3% on top of the existing 2.2%, providing a maximum special interest rate of 5.5% annually. The event runs until December 31, with a limit of 40,000 accounts on a first-come, first-served basis, one account per person.

Hana Bank introduced the ‘Salary Hana Monthly Compound Interest Savings’. Young workers can receive up to 3.4% annual interest, including a preferential rate of 2.3%. The ‘Double Up for My Home Savings’ is available to those who have subscribed to the Housing Subscription Savings, offering up to 3.3% annual interest including a preferential rate of 2.2%.

Aggressive deposit acquisition policies by internet-only banks are also noteworthy. Internet banks are attractive because they do not have complicated conditions unlike others. K Bank raised the interest rate of its representative deposit product, ‘CodeK Fixed Deposit’, by 0.1 percentage points starting from the 1st. The rate increase applies uniformly across all subscription periods. K Bank was the first in the banking sector to raise fixed deposit interest rates by 0.2 percentage points immediately after the base rate hike announcement in August. Kakao Bank increased savings and time deposit interest rates by up to 0.40 percentage points, expanding the increase compared to existing banks (0.05 to 0.35 percentage points). Toss Bank, launched on the 5th, introduced the Toss Bank Account offering an unconditional 2.00% annual interest rate.

The reason for the emergence of such high-interest products is that banks need to secure cash assets equivalent to the loans they have issued. Also, it is to actively attract high-quality customers amid the interest rate hike period. A banking industry official said, “With the base rate hike, various banks are launching special savings and time deposit products. Although preferential conditions can be strict, finding a product that suits oneself can be very helpful.”

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