"Let's Quickly Choose Savings and Deposits"... 20 Trillion Won Pooled in Just 20 Days

20 Trillion Won Deposited in Savings and Time Deposits at 5 Major Banks in 20 Days
Stock Market Uncertainty Persists
Base Interest Rate to Be Raised Further by Year-End
"Let's Quickly Choose Savings Products with High Annual Interest Rates," Public Opinion Forms

[Asia Economy Reporter Sim Nayoung] As commercial banks flood the market with fixed deposit and installment savings products offering interest rates above 3%, a massive inflow of 20 trillion won has been attracted in just 20 days. With ongoing uncertainties in the stock market and the Bank of Korea announcing plans to further raise the base interest rate by the end of the year, public sentiment has formed around "quickly choosing fixed deposit or installment savings products with high annual interest rates," leading to a continuous stream of customers visiting banks.

As of July 20, the total balance of fixed deposits and installment savings at the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) reached 741.986 trillion won, an increase of 19.4258 trillion won compared to the end of June (722.5602 trillion won). Of this, fixed deposits accounted for 18.9267 trillion won, and installment savings for 4.991 trillion won. Compared to the increases of 5.3191 trillion won and 800.6 billion won respectively from the end of May to the end of June, the growth in July has been much larger. Since fixed deposits involve depositing a large sum at once to manage a lump sum, and installment savings involve depositing a fixed amount monthly to accumulate a lump sum, the increase in fixed deposits is larger than that of installment savings.

This year, noticeable increases in fixed deposits and installment savings were observed in January (11.2895 trillion won), April (1.9591 trillion won), and May (19.9375 trillion won), months when the Bank of Korea raised the base interest rate. The financial sector expects that with the Bank of Korea’s big step (a 0.5 percentage point hike) on July 13 and about a week of remaining business days in July, the increase will easily surpass that of May.

Commercial banks are also competing to raise interest rates on fixed deposits and installment savings. KB Kookmin Bank raised rates on 33 fixed deposit and installment savings products starting July 18. The senior citizen-exclusive 'KB Golden Life Pension Preferential Deposit' and the MZ generation-tailored 'KB My Fit Installment Savings' increased their top rates by 0.7 percentage points, offering 2.75?2.95% and 2.80?4.40% respectively.

Shinhan Bank’s Solpyeonhan fixed deposit offers 3.20%, and the Beautiful Courage installment savings offers 3.70%. Woori Bank’s rates include 3.95% annual interest for Woori SUPER main transaction installment savings and 3.60% for Woori first transaction preferential fixed deposits. Hana Bank also raised the Salary Hana Monthly Compound Interest Installment Savings rate to 3.4%, while NH Nonghyup’s 'All One e-Deposit' is running a special promotion adding 0.4 percentage points to the base 3.00% rate.

A representative from a commercial bank said, "With expectations of further base rate hikes, there is a preference for short-term rather than long-term fixed deposits and installment savings." They added, "Second-tier financial institutions like Saemaeul Geumgo have already introduced installment savings products with rates in the 7% range, and soon 4% range fixed deposit and installment savings products will become the trend at commercial banks as well."

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