Hana Bank Lowers Savings and Deposit Interest Rates... 0% Range Even for 1-Year Term

On the 3rd, the headquarters of Hana Bank in Jung-gu, Seoul, displayed the brand name "Hana Bank" without "KEB." Hana Bank announced that from this day forward, it will change its brand name from KEB Hana Bank to "Hana Bank" and will embark on a new start as the New Hana Bank preparing for the next 10 years. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kim Min-young] Hana Bank lowered its savings and deposit interest rates across the board on the 1st.

According to the financial sector, Hana Bank reduced the base interest rates on more than 50 savings and deposit products and certificate of deposit notes starting that day. The reduction ranged from 0.05 to 0.3 percentage points. For some discontinued products and policy financial products, the rates were sharply cut by 0.45 to 0.75 percentage points.

The base interest rate for regular time deposits (maturity payment type) dropped from 0.35?0.95% per annum depending on the subscription period to 0.25?0.75%. The base rate for the e-Plus installment savings also fell from 0.85?1.05% to 0.6?0.8%.

The interest rate for Hana OneQ installment savings also decreased to 0.7% for a 1-year maturity.

Policy products such as the Youth Hope Savings Account (60 months) and Hope Savings Account II (36 months) also saw their rates fall from 2.75% and 2.5%, respectively, to 2%.

This reduction in deposit interest rates by the bank was influenced by the Bank of Korea’s cut of the base interest rate to 0.5% at the end of May. As loan interest rates fall following the base rate cut, keeping deposit rates unchanged would deteriorate profitability.

Hana Bank had been the only major commercial bank to delay lowering deposit interest rates but eventually surrendered to the historically low base rate.

Immediately after the Bank of Korea’s rate cut, the four major commercial banks?Shinhan, KB Kookmin, Woori, and NH Nonghyup?lowered their deposit rates, followed by foreign banks SC First and Korea Citibank. Internet-only banks like KakaoBank and K Bank, which had offered relatively higher rates, as well as regional banks, also reduced their savings and deposit interest rates.