Savings Accounts Offering 10% Annual Interest Draw Stock Investment Funds Back to Banks
As bank deposit and savings account rates rise in succession, savings products offering annual interest of over 10% have emerged. Thanks to higher rates, depositors can now earn returns through deposits alone, and money once invested in stocks is flowing back into banks.
BNK Gyeongnam Bank's fixed-term deposit launched last month offers a maximum annual interest rate of 4.05%. The bank rolled out the higher-rate product after its previous offering, with a top rate of 3.8% and a sales cap of 500 billion won, sold out in just a month and a half. Within roughly two months of launch, the new product attracted 900 billion won in funds. Hwang Se-jin, deputy general manager of the bank's individual customer division, said, "With the KOSPI hovering around the 5,000 mark and showing no clear direction, customers are comparing rates at commercial banks and moving their money into safer assets."
NH Bank also released a deposit product with a maximum annual rate of 3.9%, which sold out within days of launch, prompting the bank to begin its third round of sales recently. Amid rising market rates, savings accounts offering annual interest of 10% or more are also being launched one after another.
The combined fixed-term deposit balance of the five major commercial banks, including NH Bank, exceeded 1,000 trillion won for the first time ever last August and stood above 1,030 trillion won as of the end of last month. The number of customers seeking deposit consultations at NH Bank's Gyeongnam branch also rose more than 10% in the second half of the year compared with the first half.
Woo Gil-hye, deputy center head at NH Bank's Gyeongnam branch, said, "When further rate hikes are expected, it seems wise to focus on short-term products and then shift to longer-maturity products once rates have peaked."
Meanwhile, investor deposits in the domestic stock market shrank to 88.7 trillion won as of the end of last month, with roughly 16 trillion won withdrawn in a single month as the KOSPI fell to the 5,000 range.
