[1mmGeumyungTalk] The Hidden Reasons Behind Banks Saying "Interest Paid Immediately"

Banks are rolling out 'Instant Interest Payment' services one after another. With internet-only banks as well as commercial banks launching similar services, it seems to be establishing itself as a 'trend in the banking sector.'

KakaoBank has introduced the 'Instant Interest Payment' service to its parking account Safe Box, which previously allowed interest collection only once a month. When customers want to receive interest, they can access the KakaoBank app, check the interest accumulated up to the previous day, and press the 'Receive' button to get the interest immediately. Receiving interest daily also allows customers to enjoy the 'compound interest' effect, where interest is earned on both the principal and the interest. K Bank also added the instant interest payment feature to its parking account Plus Box in January.

The service that pays interest immediately was first introduced by Toss Bank in March last year. Toss Bank's 'Receive Interest Now' service has gained popularity, with usage reaching 180 million times this month. Among commercial banks, Sh Suhyup Bank opened the door by launching the 'Receive Interest Now' service last month on its mobile banking-exclusive parking account 'Sh Daily Receive Account.' This service allows customers to receive interest accumulated up to the previous day immediately upon request via the mobile banking app, enabling daily interest receipt.

The reason banks are introducing 'Instant Interest Payment Services' like this is that after Toss Bank launched the service and it gained fame, there were quite a few customer requests. An official from an internet-only bank said, "After Toss Bank introduced the service and it became a hot topic, some customers inquired if there was a similar service."

Moreover, from the banks' perspective, there is the advantage of attracting 'core deposits.' Parking accounts with the instant interest payment service tend to have lower interest rates compared to fixed-term deposits and savings, so they are classified as low-cost deposits. Increasing low-cost deposits allows banks to raise funds at a lower cost, which benefits the banks' profitability. In fact, KakaoBank's Safe Box and K Bank's Plus Box offer interest rates of about 2.4% and 2.6% per annum, respectively.

Also, the 'Instant Interest Payment Service' can help increase the monthly active users (MAU) of mobile banking apps. Since customers frequently access the app to receive interest, the number of visits increases. A financial industry official said, "Since it does not incur large interest costs but helps with deposits and increases app users, the effect of launching the service can be said to be cost-effective."

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