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[Asia Economy Reporter Minwoo Lee] Deposit interest rates (savings and installment savings) are also rising in succession following the base interest rate hike. Deposit products with interest rates in the 3% range, as well as installment savings products with rates in the 5% range, have appeared.

According to the financial sector on the 31st, KB Kookmin Bank raised the interest rates on 34 types of fixed deposits and installment savings by up to 0.3 percentage points (p) starting today. For KB Double Moa Deposit, the highest annual interest rate offered for a 1-year term is 2.55%. For KB Kookmin Premium Installment Savings (fixed installment type), the highest interest rate for a 5-year term has been adjusted upward to 3.75%. As a result, major commercial banks including KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup have all raised their deposit interest rates since the end of this month. In addition, regional banks such as BNK Busan Bank and internet-only banks like K Bank have recently increased interest rates on deposit and installment savings products, showing a chain reaction of interest rate hikes in the banking sector. This is due to the Bank of Korea raising the base interest rate by 0.25 percentage points to 1.75% per annum last week.

Accordingly, deposit products with interest rates in the 3% range and installment savings products with 5% rates have appeared in commercial banks. K Bank’s ‘Code K Fixed Deposit’ is a representative example. According to the Bankers Association, this product offers an annual interest rate of 3.00% if subscribed for more than one year. If the subscription period is extended to 3 years, the interest rate rises to 3.5% per annum. Notably, this product has no special preferential conditions. Anyone aged 17 or older can receive interest in the 3% range. This condition will be offered starting from the 1st of next month and will be retroactively applied to those who subscribed by the 19th of this month.

For installment savings, which generally offer higher interest rates than deposits, interest rates in the 3% range are already common. Furthermore, products offering interest rates in the 4-5% range have also appeared. Shinhan Bank’s free installment savings product ‘New Hope Savings’ offers up to 5% per annum (based on 3 years). BNK Busan Bank’s ‘2030 Busan World Expo Savings’ and IBK Industrial Bank’s ‘IBK W Small but Certain Happiness Account (installment-type medium-term bond)’ offer interest rates of 4.30% and 4.25% respectively for a 3-year term. Jeju Bank’s ‘The Tamnaneun Savings 3’ also provides an interest rate of 4.05% per annum (3-year term, fixed installment type).

A representative from a commercial bank said, "It is common that a base interest rate hike is a boon for bank deposit products but a bane for the stock market," adding, "After the stock market experienced a record rally during the COVID-19 period and has struggled to recover this year, bank deposit and installment savings products will stand out as attractive investment options."

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