Even with High Interest Rates, Demand Deposit Accounts Also Reach 3% Range... Interest Rate Competition Increases

From Savings Banks to Internet Banks and Foreign Banks, Interest Rates Rise One After Another
Matching the Average Interest Rate of Deposit Banks' Time Deposits

[Asia Economy Reporter Minwoo Lee] As the base interest rate rises sharply, interest in 'parking accounts' that pay interest even for a single day deposit is growing. Not only internet-only banks but also savings banks are competing, leading to products with interest rates in the 3% range comparable to regular deposits at commercial banks. Experts advise carefully checking the limits and preferential interest rate conditions.

According to the financial sector on the 8th, savings banks are successively launching parking account products with annual interest rates in the 3% range. A representative example is Welcome Savings Bank's 'Welcome Office Worker Love Ordinary Deposit.' If conditions such as salary transfer and automatic transfer are met, an interest rate of 3% per annum can be received within a limit of 50 million KRW. OK Savings Bank decided to offer up to 3.3% annual interest starting next month on its demand deposit account 'OK e-Eut Account,' the highest among parking accounts in the market. Pepper Savings Bank's 'Peppers Parking Account' also offers 3.2% annual interest up to a deposit of 50 million KRW without special conditions. Despite being a demand deposit account with liquidity management challenges, it offers an interest rate level comparable to the average fixed deposit rate of commercial banks. According to the Korea Federation of Banks, the average fixed deposit interest rate of 19 deposit banks is about 3.23% for 12 months.

Internet-only banks are also raising parking account interest rates one after another. KakaoBank raised the interest rate of its parking account product 'Safe Box,' with a limit of 100 million KRW, from 2.0% to 2.2% per annum starting today. K Bank offers 2.1% annual interest on its parking account product 'Plus Box.' The maximum deposit limit is 300 million KRW, the highest among banks. The foreign bank SC First Bank recently joined the competition. It decided to offer up to 2.5% annual interest for six months to first-time customers of its non-face-to-face demand deposit product 'First EZ Account.' The highest interest rate applies without special conditions for first-time transactions.

Meanwhile, Toss Bank, which actually sparked the parking account craze, remains quiet. The 'Toss Bank Account' still offers 2% annual interest up to 100 million KRW and 0.1% annual interest on amounts exceeding 100 million KRW. However, its strength lies in the differentiated feature of 'daily compound interest.' Since interest is settled daily, the compound interest effect can increase the yield. This sense of 'achievement' has also contributed to its popularity among financial consumers. Among Toss Bank's deposit balances, which only have regular installment savings products and no separate fixed deposit products, the proportion of Toss Bank Accounts exceeds 90%. Toss Bank's deposit balance reached 26.4 trillion KRW as of the end of last month, an increase of about 5.4 trillion KRW compared to 21 trillion KRW in the first quarter.

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