[Practical Finance] Scared of Stocks? How About Safe Savings and Time Deposits?

Safe Products with Principal Guarantee
High-Interest Products Also Launched One After Another

[Asia Economy Reporter Kiho Sung] Office worker Kim Hyun-seon (43, pseudonym) found herself in a dilemma right after the Lunar New Year holiday. Managing the bonus she received from her company and the New Year's money her children received was more challenging than expected. Although there is a current craze for stock investment, she felt intimidated due to her lack of knowledge and found it hard to ignore advice from those around her warning that now might be the market peak. Ultimately, Kim turned her attention to special bank products that offer no principal loss, free deposits and withdrawals, and can help instill a saving habit in her children.

After the Lunar New Year holiday, savings and deposit products that effectively manage bonuses or New Year's money are gaining attention. Especially since principal protection is possible, these products are popular among customers seeking safe investments. Although 0% interest rates have become commonplace, if you look carefully, high-interest products offering 5-6% rates are being launched one after another. By examining products suited to different purposes and durations and using them efficiently, one can expect to earn considerable interest.

If you use Woori Bank as your main bank, you should not miss the ‘Woori Magic Savings by Woori Card’ product. This product offers an annual interest rate of 6%. Considering that existing bank savings and deposit rates range from 0 to 1%, this is an attractive high-interest product. It is a follow-up to the ‘Woori Magic6 Savings’ which sold out within two months of its launch last year.

The subscription period for the product is one year, with a monthly deposit limit of up to 500,000 KRW. The interest rate consists of a base rate of 1.0% per annum, a preferential rate of up to 1.0 percentage point per annum, and a special preferential rate of up to 4.0 percentage points per annum. The preferential rate is provided up to 1.0 percentage point per annum when subscribing to Woori Open Banking service, consenting to marketing communications for Woori Bank products and services, and transferring salary (or pension) to a Woori Bank account. The special preferential rate of up to 4.0 percentage points per annum is given when meeting Woori Card usage and automatic transfer conditions.

Children’s Savings and Deposit Products: Attractive Interest Rates and Unique Services

There are also various products ideal for saving children’s New Year's money. These products are especially attractive because they offer various additional services for children and teenagers beyond just interest rates.

Shinhan Bank offers the ‘My Junior Savings’ product. This product is available to those under 18 years old and offers a maximum interest rate of 2.2% per annum for those under 18. If conditions are met, free enrollment in ‘Safety Insurance’ is possible. Hana Bank has the ‘Child Dream Hana Savings,’ a flexible installment savings product suitable for depositing New Year's money. This product allows registration of the desired university before the child turns 14, and if the child actually enrolls in that university, a preferential interest rate of 2% per annum is applied for one year before maturity.

NH Nonghyup Bank’s ‘NH Good Child Savings’ is also a financial product exclusively for children. It is suitable for elementary school students who want to steadily save small amounts like New Year's money every year. If siblings join together on the same day, a preferential interest rate of 0.1 percentage points is provided. KB Kookmin Bank’s ‘KB Young Youth Savings’ is available to those under 18 with a contract period of one year. The interest rate is 0.85% per annum, and preferential rates up to 1.3 percentage points can be received depending on conditions. Notably, an additional 0.5 percentage points is given for celebrating the child’s growth and fingerprint registration. If the subscriber’s age is 0, 7, 13, 16, or 19 years, a 0.5 percentage point interest rate is provided during the contract period corresponding to that age. If fingerprint registration is done during the contract period and a certificate issued by the police chief is submitted, an additional 0.1 percentage point interest rate is granted. Even if both conditions are met, a maximum of 0.5 percentage points interest rate is provided.

Waiting Funds for Stocks? ... ‘Parking Account’ That Pays Interest Even for One Day

‘Parking account’ products for customers who have a lump sum such as bonuses are also gaining attention. Usually, parking accounts offer interest rates in the 0% range, but Pepper Savings Bank launched the ‘Pepper Lulu Parking Account’ to commemorate the relocation of its headquarters and main office building, offering 2% annual interest even if deposited for just one day. If the deposit amount is 3 million KRW or less, 2% per annum is provided; if it exceeds 3 million KRW, 1.5% per annum is given, with a maximum deposit limit of 200 million KRW. It is an exclusive product for non-face-to-face channels, so there is no need to visit a branch, which is also attractive.

K Bank also operates the ‘Plus Box’ parking account, which offers an interest rate of 0.7% per annum even for one day’s deposit. This product allows deposits up to 100 million KRW and is especially popular as an ideal product for placing waiting funds amid high stock price volatility and a surge in initial public offerings (IPOs).

JT Savings Bank’s parking account ‘JT Jump-up Savings Deposit’ offers a base interest rate of 1.3% per annum (variable rate). JT Jump-up Savings Deposit guarantees interest benefits even if deposited for just one day, with no separate conditions such as deposit period or balance maintenance. This product can be subscribed to through the Savings Bank Association’s mobile application SB Toktok Plus. JT Chinhae Savings Bank also operates a ‘Savings Deposit’ offering up to 1.5% per annum (differential interest rates applied depending on deposit amount).

If you currently have a pet dog, consider JT Chinhae Savings Bank’s ‘JT Jump People Plus Regular Savings.’ This savings product offers an interest rate of 3.0% per annum (12-month maturity) for customers living with their pet dogs, with a monthly deposit limit of 500,000 KRW. It is especially attractive for accumulating spare funds in preparation for large expenses such as veterinary treatment or surgery fees for the pet. You can subscribe simply by showing a photo taken with your dog at the branch counter without any complicated procedures. The passbook can also include both the customer’s and the dog’s names together.