Sangsangin's 33.2% Special Savings? ... Stir Over High-Interest Rate Overcompetition Concerns

Sangsangin Savings Bank Launches Special Savings Product with 33.2% Annual Interest
Industry and Authorities Express "Concerns Over Excessive Competition" Due to High Rates

Sangsangin Savings Bank's special promotion offering a high-interest savings product with an annual rate of 33.2% is causing a stir in the savings bank industry. While it can effectively secure deposit customers and generate promotional benefits, it may inadvertently fuel excessive competition. Financial authorities are also considering messages of restraint and recommendations, so repercussions are expected.

According to the financial sector on the 17th, Sangsangin Savings Bank announced the launch of a special fixed savings product offering a maximum annual interest rate of 33.2% the previous day. This rate is the highest among special promotion products ever released in the industry. Typically, high-interest special promotion products circulated in the savings bank sector are formed around the 5% range. Even then, strict and complex conditions must be met. Considering the current interest rate hike period, this rate is about six times higher.

The interest rate is provided to 32 people selected by lottery. The selection is done by spinning a roulette once a day. Customers can deposit from 10,000 KRW up to 1,000,000 KRW monthly for six months. Additionally, 150 more people are selected to receive a 3.32% interest benefit on each savings and fixed deposit. The fixed deposit has the same maturity but allows deposits up to 5,000,000 KRW. All events can be participated in only once per day, and additional participation is restricted upon winning.

"Although there is no legal issue, it may trigger excessive competition"

Financial authorities are reviewing the details of the high-level special promotion product launch and are considering whether to verbally express concerns or recommend restraint. If marketing methods offering exceptional benefits through lotteries become popular, there is a risk of overheating competition within the industry. A Financial Supervisory Service official explained, "Providing benefits through lotteries is not legally problematic, so administrative action is unlikely," but added, "there appears to be a potential issue as it could induce excessive competition."

Voices from within the industry also suggest that marketing efforts to gain an advantage in the customer acquisition battle could ignite. A savings bank official said, "Offering high-interest benefits based on lotteries can achieve high promotional effects at low costs, but there are side effects," adding, "As individual companies increasingly raise the level of prizes and benefits, the entire industry could experience overheating, which may also prompt intervention from authorities."

Financial authorities have intervened in various ways whenever signs of overheating appear in the financial sector. At the end of last month, KB Kookmin Bank and Woori Bank canceled the Genesis vehicle prizes offered in their MyData service pre-registration event. This is interpreted as a response to the financial authorities' message to avoid excessive marketing during the MyData business process.

Meanwhile, Sangsangin Savings Bank explained that the event was conducted as a customer appreciation initiative rather than a business operation. A Sangsangin Savings Bank representative stated, "We are sharing profits within our capacity," and added, "Since it is not an unlimited receiving method, there is no problem."

This content was produced with the assistance of AI translation services.