[Financial Essay] "Put in the Effort and Secure a 5% Savings Deposit"

[Asia Economy Reporter Kim Min-young] After the Bank of Korea’s base interest rate fell to the 0% range, commercial banks have been consecutively lowering their savings and deposit interest rates. One bank recently lowered the interest rate on a 1-year fixed deposit to 0.6% per annum. Even if you deposit 10 million KRW for one year, the interest earned after tax is about 50,000 KRW.

Nevertheless, if you carefully search online or through smartphone applications (apps), you can still find high-interest products with rates above 5%. Such products are available not only at savings banks but also at commercial banks.

Welcome Savings Bank’s “Welbanghaja Savings” launched last month offers a 5.0% interest rate if a few conditions are met. The basic interest rate is 1.5% per annum, and if you have at least two CMS or Giro automatic payment transactions per month through a Welcome Savings Bank free deposit and withdrawal account for six months during the contract period, you receive a preferential interest rate of 2.0 percentage points. Additionally, if the average balance of the free deposit and withdrawal account is maintained at 500,000 KRW or more, an extra preferential interest rate of 1.5 percentage points is provided.

This savings product can be subscribed to via the mobile app Welcome Digital Bank. The monthly deposit amount is up to 200,000 KRW, and the subscription period is 12 months.

Acuvon Savings Bank also recently revamped its mobile app and introduced a mobile-exclusive special sales product with a 5.0% interest rate savings account. The basic interest rate is high at 3.9%, and if you agree to the Acuvon Membership Plus service, you get an additional 0.1 percentage point. Registering one automatic transfer and making six or more payments grants a 1.0 percentage point preferential interest rate. This product is limited to 10,000 subscribers, with a maximum monthly deposit of 200,000 KRW and a subscription period of 12 months.

High-interest savings products are also noticeable at commercial banks. Woori Bank launched the “Woori Magic Savings by Hyundai Card” product on the 8th, offering up to 5.7% interest. The subscription period is one year, with a maximum monthly deposit of 500,000 KRW.

However, the conditions are somewhat strict. The basic interest rate is 1.7%, with a 0.5 percentage point preferential rate for first-time transactions or salary account registration, and up to 3.5 percentage points in special preferential rates depending on card usage performance.

For first-time Woori Bank customers, if they record Hyundai Card usage of 6 million KRW or more annually, they receive 3.0 percentage points, and an additional 0.5 percentage point preferential interest rate is granted if they set up one automatic transfer with Hyundai Card.

For existing customers, an annual card usage of 10 million KRW or more grants a 1.0 percentage point preferential rate, and setting up one Hyundai Card automatic transfer provides an additional 0.5 percentage point preferential interest rate.

KDB Industrial Bank is also selling a 5.0% savings product exclusively for SK Telecom customers. Customers who maintain their SK Telecom line until maturity receive a 4.0% interest rate, and those maintaining a plan of 50,000 KRW or more per month receive an additional 1 percentage point preferential rate. The condition is to set up automatic payment for telecom fees through a newly opened account at Industrial Bank. This product can be subscribed to via the mobile financial service app “Fink.” It is a free installment savings with monthly deposits ranging from 10,000 to 200,000 KRW, and the subscription period can be chosen between one or two years.

There is even a product offering a 6.9% interest rate. DB Savings Bank sells the “Dream Big Fixed Savings,” which has a basic interest rate of 3.1% and a preferential interest rate of 3.8%. If you set the subscription period and monthly deposit amount to one year and 100,000 KRW, respectively, and newly subscribe to DB Insurance’s direct internet automobile insurance for 300,000 KRW or more online at least 30 days before the maturity of the savings (insurance subscription period is one year), you receive the preferential interest rate.

These high-interest products can be found on the “Financial Products at a Glance” site operated by the Financial Supervisory Service, as well as on the websites of the Korea Federation of Banks and the Korea Federation of Savings Banks. It is also good to frequently visit individual bank and savings bank websites.