‘Yetech’ Flock to Savings Banks with 6% High Interest Rates and Even Open Runs

OK Savings Bank and Others Launch Special Rate Products One After Another
Seoul Gwanak Credit Union Sells Popular 10% Annual Interest Fixed Deposit

[Image source=Pixabay]

[Asia Economy Reporter Yoon Seul-gi] With the emergence of high-interest fixed deposit products offering up to 6% interest rates at savings banks, 'Tech (Deposit + Investment) enthusiasts' are flocking to these products.

According to the financial sector on the 28th, OK Savings Bank is launching a special sale of its major fixed deposit products today. This is an increase of up to 1.3 percentage points compared to before, with a special interest rate of 6.5% per annum (before tax) applied to OK Fixed Deposit and OK Safe Fixed Deposit. OK Savings Bank plans to end the special sale after a separate notice once the quota is exhausted.

SBI Savings Bank, the industry leader, offers up to 5.9% annual interest on its compound fixed deposit (variable interest rate) product available through its mobile banking application 'Cider Bank.' This is due to a 1.15 percentage point interest rate increase starting today.

Earlier, after the Bank of Korea raised the base interest rate to 3% on the 11th of this month, savings banks have been competitively raising deposit interest rates. On the 20th, Daol Savings Bank introduced fixed deposits with interest rates in the 6.5% range, and SangSangIn-affiliated savings banks, SangSangIn Savings Bank and SangSangIn Plus Savings Bank, offered up to 6.0% annual interest on the 19th but recently lowered it slightly to 5.75%.

ShinHyup conducted a special sale of high-interest installment savings products with rates in the 10% range. Seoul Gwanak ShinHyup launched a 12-month fixed installment savings product with a 10% annual interest rate on the 27th, and the 50 billion KRW quota was fully subscribed within a day. The online-only quota of 35 billion KRW was filled in just 6 minutes. Offline branches were crowded with customers waiting from early morning before business hours, and some branches closed their counters only at 7 PM.

Meanwhile, although savings banks offer interest rates about 1% higher than commercial banks, caution is necessary as past repeated bankruptcies of savings banks have caused damage to financial consumers. According to the Depositor Protection Act, deposits up to 50 million KRW per person, including principal and interest, are protected per savings bank. For example, if a fixed deposit product with a one-year maturity offers 6% annual interest, one must deposit about 47 million KRW to avoid losses.