With Heated Deposit Interest Rate Competition... The New Term 'Bangboard Chart' Emerges

As the era of a 3% base interest rate begins for the first time in 10 years, commercial banks have been raising deposit interest rates one after another, bringing the bank fixed deposit interest rates close to the 5% annual mark. On the 26th, a banner displaying the interest rates for fixed savings deposits was posted at a commercial bank in Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Heo Midam] Amid the interest rate hike period, the so-called 'interest rate nomads' who seek even slightly higher interest rates are moving faster. They check the daily changing rankings of deposit interest rates and even engage in 'open runs' (rushing to the store as soon as it opens) to subscribe to special promotional products for higher returns. As the interest rate hike trend is expected to continue for the time being, such efforts by financial consumers are also likely to persist.

Recently, with the successive release of high-interest products, financial consumers' interest has increased. Currently, the one-year fixed deposit interest rates at the four major banks?KB Kookmin, Shinhan, Hana, and Woori Bank?have risen to the 4% range annually, and some savings banks have even launched fixed deposits with an 8% annual interest rate.

With interest rates soaring day by day, cases of sharing news about special deposit and savings promotions are emerging mainly on online financial communities. One netizen said, "I tried to subscribe to a special promotional product offering a 10% annual interest rate at Seoul Gwanak Credit Union but failed," adding, "They said online sales start at 6 a.m., so I waited early in the morning, but many people crowded in, causing continuous errors." Seoul Gwanak Credit Union started a special promotion for a 10% annual interest (1-year maturity) fixed savings product from the 27th. The online limit of 35 billion KRW was sold out within 6 minutes after sales began at 6 a.m. The offline sales limit was 15 billion KRW, and crowds gathered for an 'open run' even before the branch opened at 9 a.m.

On the morning of the 27th, citizens who took a number before business hours were waiting in front of Gwanak Credit Union in Seoul to sign up for a special savings account offering an annual interest rate of 10%.
[Image source=Yonhap News]

As deposit and savings interest rates fluctuate, a new term called 'Bangboard Chart' has emerged. 'Bangboard Chart' combines the English word 'bank' and 'chart,' meaning the real-time ranking of deposit interest rates at various savings banks. An example is the Bankers Association website that publicly compares deposit product interest rates. Financial consumers actively use such sites to gain even a small advantage amid rising daily interest rates.

One netizen said, "As a consumer, who would compare interest rates one by one?" and added, "Using the Bankers Association or Financial Supervisory Service websites is very useful because you can compare everything from savings to deposits on a single site."

Meanwhile, the interest rate hike trend is expected to continue for the time being. Lee Chang-yong, Governor of the Bank of Korea, indicated that the final benchmark interest rate level would be 3.5% as part of ongoing efforts to respond to high inflation.

At a press conference with accompanying reporters during the G20 Finance Ministers and Central Bank Governors Meeting and the International Monetary and Financial Committee (IMFC) meeting in Washington, USA, on the 15th (local time), Governor Lee said, "Due to high uncertainty, we do not yet know how much the base rate will be raised at the Monetary Policy Committee meeting in November, but the hike trend will continue," adding, "If things go as expected, the final level will be around 3.5%."