[Base Rate 3%] Commercial Banks Raise Deposit Interest Rates by up to 1.0%P

Woori Bank Raises Deposit Interest Rates by up to 1.0%p
NH Nonghyup Decides to Increase Fixed Deposits by 0.5%p and Installment Savings by 0.5~0.7%p
New Rates to be Applied Sequentially from the 13th
Introduction of Time Deposits over 5% and Installment Savings over 6% Expected

[Asia Economy Reporter Sim Nayoung] On the 12th, as the Bank of Korea implemented a big step by raising the base interest rate to 3% (a 0.5 percentage point (p) increase at once), commercial banks immediately decided to raise the interest rates on savings and deposit products. Banks will raise interest rates by at least the amount of the Bank of Korea's base rate hike (0.5%p), and the increased rates are expected to be applied sequentially from this week depending on the bank. Next week, savings, deposits, and loan interest rates across the entire financial sector, including the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup), will be raised.

Woori Bank will raise the interest rates on 19 fixed deposits and 27 installment savings products by up to 1.00%p starting from the 13th. For deposit products, the non-face-to-face exclusive 'Woori First Transaction Preferential Fixed Deposit' will be raised by 1.00%p from a maximum annual rate of 3.80% to 4.80%, and interest rates on other fixed deposit products will increase by 0.30~0.50%p. For installment savings, 'Woori Pay Savings' and 'Woori Mgic Savings by Lotte Card' will be raised by 1.00%p, and most other installment savings products will see an increase of 0.30~0.80%p.

NH Nonghyup has decided to raise the interest rates on fixed deposits (lump-sum deposits) by 0.5%p and installment savings (accumulated deposits) by 0.5~0.7%p starting from the 14th. Shinhan Bank, Hana Bank, and Kookmin Bank are also in the process of deciding the extent of the interest rate hikes on deposits. A representative from a commercial bank said, "Deposit interest rates will be raised by at least the amount of the base rate hike or more," adding, "We plan to expedite the rate hikes within this week, so those wishing to subscribe to savings or deposit products will benefit from signing up after the increased rates are announced."

As banks raise deposit interest rates over this week and next, fixed deposit products with rates in the 5% range and installment savings products with rates in the 6% range are expected to appear. As of the 11th, among the five major banks' fixed deposit products, the highest interest rate is offered by Woori Bank's WON Plus Deposit at an annual rate of 4.54%. Among installment savings, Shinhan Bank's Sae Hope Savings (5.5% annually) and Hana Bank's My Home Double Up Savings (5.5%) offer the highest rates.

Loan interest rates will also rise. For variable-rate mortgage loans (interest rates change every six months) and some credit loan products, the COFIX (Cost of Funds Index) announced on the 17th is expected to immediately reflect the increase. A financial sector official said, "The COFIX announced by the Banks' Association on the 17th reflects the market in September, and the Bank of Korea's big step on the 12th will be reflected in the October COFIX announced next month," adding, "Accordingly, mortgage loan interest rates are expected to rise further in November."