Withdrawing Deposits and Opening Overdraft Accounts to Ride the 'Roller-KOSPI'... Banks Intensify Deposit Defense [Financial Microscope]

Demand Deposits at Five Major Banks Drop by 5.7 Trillion Won in One Week
Increase in Credit Line Balances Marks Largest Growth Since the 2022 Debt-Fueled Investment Boom
Banks Respond with Higher Deposit Rates and Launch of High-Yield Special Pr

Recently, demand deposits at major banks have been declining, while the outstanding balance of overdraft accounts (credit line loans) has been increasing. This paradoxical phenomenon is being interpreted as a result of individual investors increasing their stock market investments, even as the KOSPI is at risk of falling below the 5,000 mark and the KOSDAQ below the 1,000 mark due to the Iran crisis. Banks are also making all-out efforts to attract deposits, raising time deposit interest rates and launching high-interest special products.

'Withdrawing from Accounts, Opening Overdrafts'...Money Moves Accelerate Amid Stock Market Volatility

According to the financial sector on March 11, the demand deposits of the five major commercial banks (KB Kookmin, Shinhan, Woori, Hana, and NH Nonghyup) stood at 679.1552 trillion won as of March 6. This is a decrease of 5.7052 trillion won compared to the end of last month (684.8604 trillion won).

The prevailing interpretation is that funds set aside as investment reserves were moved into the stock market as share prices experienced sharp fluctuations. On February 27, when the KOSPI index soared to an intraday high of 6,347.41, demand deposits had increased by 33.3225 trillion won compared to the end of January. After the United States conducted airstrikes on Iran on February 28, concerns over the spread of war led to continued net selling by foreign investors, pushing the KOSPI down to the 5,000 mark on March 9. In contrast, individual investors are seeing this as a buying opportunity and have increased their purchases. A private banker (PB) at one of the commercial banks said, "Recently, we have seen a considerable number of clients inquiring about investing in stocks by mobilizing deposits or insurance policy loans," and added, "Except for clients who do not invest in stocks or funds at all, we are refraining from making aggressive stock investment recommendations."

The trend of so-called 'debt-fueled investment' is also becoming more pronounced. The outstanding balance of overdraft accounts at the five major banks increased from 39.4249 trillion won as of February 27 to 40.8151 trillion won as of March 6, a rise of 1.3902 trillion won. By bank, the overdraft balance is increasing by several hundred billion won every day. Compared to previous month-ends, the current balance is the highest in three years and two months since the end of December 2022 (42.0546 trillion won). On a monthly basis, the increase is the largest since November 2020, during the peak of real estate and cryptocurrency leveraged investments (an increase of 2.1263 trillion won). A banking industry official stated, "The balance of overdraft accounts had dropped to the 30 trillion won range, but recently surged due to demand for bargain buying amid the Iran crisis," adding, "Although there are no signs of soundness issues yet, we are closely monitoring the situation."

Rising Deposit Rates and Special Savings Offers...Commercial Banks Focus on Attracting Deposits

Alarmed by the outflow of funds into the stock market and internet banks, commercial banks are stepping up their competition to attract deposits. Nonghyup Bank raised the base interest rate on its 'NH Allone e-Deposit' by 0.15 percentage points to 3.05% on March 3. Hana Bank and KB Kookmin Bank also raised their time deposit rates to 2.90%, with Woori Bank following suit with the same rate.

The competition for high-interest special savings products is also intensifying. Woori Bank has launched the 'Woori Bingo Savings', offering a maximum annual interest rate of 10% depending on mission performance. Shinhan Bank, which previously released a game-themed savings product offering up to 20% annual interest, is planning to introduce a new product. The 'JB Super Seed Savings' from Jeonbuk Bank, a regional bank, is offering up to 13% interest as it seeks to attract customers.

A banking industry official said, "We are adjusting interest rates to reflect the rise in market interest rates and to ensure stable management of funds," adding, "We will continue to develop products to provide competitive rates to our main customers."

Dealers are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul, on the 10th, where the KOSPI index rebounded sharply in the early session and the buy-side car was triggered as oil prices stabilized following U.S. President Donald Trump's remarks on the imminent end of the war. On this day, the won-dollar exchange rate started trading at 1470.8 won, down 24.7 won from the previous trading day. March 10, 2026, Photo by Kang Jin-hyung

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