"Catch the Money Flowing to the Stock Market" KakaoBank Raises Savings and Deposit Interest Rates by 0.20%p (Comprehensive)

Kakao Bank to Raise Savings and Deposit Interest Rates by up to 0.20%p from the 20th
Strategy to Attract Deposits as Funds Flow into the Stock Market

[Asia Economy Reporter Kiho Sung] KakaoBank has raised its savings and time deposit interest rates. This move is interpreted as an effort to attract funds flowing into the stock market amid a bullish market.

KakaoBank announced on the 20th that it has increased savings and time deposit interest rates by up to 0.20 percentage points. The increased rates apply to new subscriptions from that day.

Time deposits with maturities under 6 months will see a 0.10 percentage point increase, and those over 6 months will rise by 0.20 percentage points. The interest rate for a 1-year time deposit, previously 1.00% per annum, has been raised to 1.20% per annum starting that day.

For flexible savings deposits, the interest rate will increase by 0.20 percentage points regardless of the maturity period. The interest rate for a 1-year savings deposit will rise from the current 1.10% per annum to 1.30% per annum. An additional preferential interest rate of 0.20 percentage points is offered when automatic transfer is applied. KakaoBank stated, "We raised the interest rates on savings products to strengthen their competitiveness."

Market analysts suggest that the recent surge in leveraged investing (debt-financed investment) has intensified the flow of funds into the stock market, prompting banks to increase interest rates to boost deposits.

With major initial public offerings (IPOs) scheduled this year, there is a forecast that capital outflows to the stock market could intensify, potentially accelerating the withdrawal from savings and time deposits. Attention is focused on whether KakaoBank's move to raise deposit interest rates will spread to other banks.