Savings Bank Fixed Deposit Average Rate Surges to 3.9%... Intensifying Competition for Deposits

The average interest rate for one-year fixed deposits across 79 savings banks nationwide soared to 3.90% as of the 7th, intensifying competition to attract depositors through high-yield accounts. Savings bank deposit rates had fallen to 2.69% last November but have now risen for three consecutive months after turning upward in December.

Interest rate competition is expanding to retirement pension products. Welcome Savings Bank raised the interest rate on its one-year fixed deposits for defined contribution (DC) and individual/corporate retirement pensions (IRP) to 4.82%. Savings bank fixed deposit products for retirement pensions typically offer rates 0.1 to 0.2 percentage points higher than standard fixed deposits.

Commercial banks are raising their fixed deposit rates to the mid-3% range to secure liquidity. Jeonbuk Bank's 'JB Direct Deposit Account (Lump Sum Maturity)' currently offers a base interest rate of 3.66%.

The savings banking industry is engaging in defensive measures to retain funds by offering high interest rates. Smaller savings banks with lower brand recognition are presenting higher rates to attract capital. Some non-face-to-face fixed deposit products from CK Savings Bank, JT Savings Bank, and Sangsangin Savings Bank have offered interest rates of 4.50%.