Time Deposits Increase by 27 Trillion Won in One Month... Funds Flow into Commercial Banks

[Asia Economy Reporter Buaeri] The total balance of fixed deposits at the five major commercial banks has surpassed 700 trillion won for the first time, accelerating the trend of large sums of money flowing into savings and deposits.

According to the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) on the 6th, the balance of fixed deposits at these banks as of the end of last month recorded 712.4491 trillion won, an increase of 27.3532 trillion won compared to the previous month. The balance of installment savings also rose by 652.4 billion won to 38.1167 trillion won from the previous month.

With the Bank of Korea implementing a big step by raising the base interest rate by 0.5 percentage points last month, commercial banks raised their deposit interest rates by nearly 1 percentage point. As a result, the number of interest rate nomads seeking high-interest savings and deposits is also increasing.

According to the Bankers Association disclosure on this day, the deposit interest rates of major commercial banks reached the 3% range. There is also a phenomenon of transferring savings and deposits back to commercial banks from internet-only banks due to interest rates. A representative from a commercial bank said, "Recently, there have been many inquiries about transferring savings and deposits at branches. If the subscription period is short, transferring is advantageous, but for savings and deposits nearing maturity, it is recommended to keep them as is and subscribe to other products after maturity since it is an interest rate hike period anyway."

Deposit products from policy banks such as KDB Industrial Bank, which were somewhat distant from consumers, have also seen improved conditions due to interest rate hikes, leading to increased inquiries recently.

Meanwhile, household loans have continued to decline for seven consecutive months. The balance of household loans at the five major commercial banks has been decreasing for seven months since January this year. As of the end of last month, the balance of household loans was 697.4367 trillion won, down 2.2154 trillion won from the previous month.

By type, the balance of mortgage loans was 506.6804 trillion won, and the balance of unsecured loans was 128.8256 trillion won, decreasing by 91 billion won and 1.8533 trillion won, respectively. However, the balance of jeonse (key money) loans increased by 49.46 billion won to 133.4007 trillion won compared to the previous month.