Financial Supervisory Service Issues 'Consumer Advisory' on Preferential Interest Rate Financial Products

[Asia Economy Reporter Kim Jin-ho] The Financial Supervisory Service (FSS) has issued a consumer alert of "caution" regarding the sale of preferential interest rate financial products. It urged consumers to exercise careful attention due to ongoing complaints related to complex conditions for achieving preferential interest rates.

According to the FSS on the 24th, a total of 58 special promotional savings and deposit products, covering 2.25 million accounts, were launched from last year through September of this year.

The problem is that the interest rates paid to customers upon maturity were found to be only about 78% of the highest interest rate. Two products were reported to have rates below half of the highest rate. The FSS analyzed that the cause is the complicated and difficult-to-achieve conditions for receiving preferential interest rates, such as registering for open banking and meeting usage requirements for affiliated products.

In particular, for affiliated products that pay higher interest rates based on usage performance of partner company products and services, only 7.7% of subscribers as of the end of September received the preferential interest rate.

For installment savings products, since the accumulated amount gradually increases, the actual interest received often fell short of consumer expectations. For example, for a one-year fixed installment savings product with a 3% interest rate (monthly deposit of 100,000 KRW), the total interest received at maturity was 19,500 KRW, which is about 1.6% based on the total deposit amount of 1.2 million KRW. Consequently, despite relatively high interest rates, the proportion of accounts terminated early for special promotional products reached 21.5%.

Accordingly, the FSS urged consumers to carefully check the conditions for receiving preferential interest rates through the terms and conditions and product descriptions when subscribing to preferential interest rate financial products.

It also emphasized the importance of first confirming the actual benefits by reflecting the likelihood of meeting one’s own preferential interest rate conditions, deposit amount, and deposit period rather than just the highest interest rate, and verifying the necessity of affiliated products when preferential rates depend on their usage conditions.

The FSS plans to strengthen monitoring and analysis of financial products sold in the market to enhance financial consumers’ understanding and guarantee their right to choose.

An FSS official stated, "To protect consumers and improve their rights, we will continuously guide the preparation of explanatory materials such as product descriptions and ensure thorough explanations for products that raise consumer misunderstanding concerns or generate frequent complaints."

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