Top Banks' Fixed Deposit Rates Nearing 3%

The highest interest rates for flagship fixed deposit products at major commercial banks are nearing an annual 3%. Market interest rates have risen due to expectations of a base rate hike by the Bank of Korea, leading to increased deposit rates. The highest annual rate for 1-year fixed deposits has risen by 0.05 percentage points over the past month, reaching a range of 2.90% to 3.00%. The number of fixed deposit products offering top rates in the 3% range is growing, with some banks even providing top rates in the mid-3% range.

Shinhan Bank's 'Shinhan My Plus Fixed Deposit' offered a top rate of 3.00%. NH Nonghyup Bank's 'NH All One e-Deposit' was at 2.95%, while KB Kookmin Bank's 'KB Star Fixed Deposit', Hana Bank's 'Hana Fixed Deposit', and Woori Bank's 'WON Plus Deposit' each stood at 2.90%.

The yield on 1-year bank bonds increased from 3.221% on the 13th of last month to 3.585% on the 12th of this month. The yield on 5-year bank bonds also rose from 4.137% to 4.269% during the same period.

The rise in market interest rates has also been reflected in mortgage and personal loan rates. As of the 12th, the blended (fixed-rate) mortgage rates at the five major banks ranged from 4.46% to 7.49% per year, based on 5-year bank bond yields. Personal loan rates, for a top-tier borrower over a 1-year term, ranged from 4.39% to 6.05% per year. The increased cost of funding for banks has led to higher lending rates.