'Open Run' ShinHyup and Saemaeul Geumgo Savings and Deposits Increase by 38 Trillion Won Over 9 Months

[Image source=Yonhap News]

[Asia Economy Reporter Bu Aeri] #Recently, at Gwanak Credit Union in Bongcheon-dong, Gwanak-gu, Seoul, crowds gathered from early morning to sign up for a special fixed deposit with an annual interest rate of 10%. The online quota of 35 billion KRW was sold out within just 6 minutes of the sale start. The 'open run' that used to happen to buy popular luxury brands like Chanel has now become a familiar scene in the financial sector as well. With high-interest special promotions continuing in mutual finance institutions during the interest rate hike period, the number of 'Yetech-jok (Savings + Investment Tech)' is increasing. The balance of savings and fixed deposits at credit unions and Saemaeul Geumgo has increased by 3 trillion KRW in the past month alone, and nearly 40 trillion KRW this year.

According to the Bank of Korea and mutual finance institutions on the 4th, as of the end of September, the deposit balances of credit unions and Saemaeul Geumgo were 124.8 trillion KRW and 240.2992 trillion KRW, respectively. In the case of credit unions, the balance increased by 858.5 billion KRW compared to the end of August (123.9415 trillion KRW). Saemaeul Geumgo also increased by 1.9831 trillion KRW compared to the end of August (238.3161 trillion KRW). The deposit balance increased by 2.8416 trillion KRW in one month at credit unions and Saemaeul Geumgo, approaching 3 trillion KRW.

The deposit balance increased by 38.5338 trillion KRW in just 9 months until September this year at credit unions and Saemaeul Geumgo. In the case of credit unions, the increase in deposits this year was 13.0669 trillion KRW, already surpassing last year's increase (12.2628 trillion KRW). For Saemaeul Geumgo, the increase was 25.4669 trillion KRW until September this year. Credit unions and Saemaeul Geumgo showed a trend of increasing deposit balances by an average of 1.4519 trillion KRW and 2.8297 trillion KRW per month, respectively.

The demand for savings and fixed deposits has increased with the advent of the high-interest era, and from the second half of this year, each cooperative is responding to strengthened loan-to-deposit ratio regulations (the ratio of loan balance to deposit balance). Due to the independent operation characteristics of credit unions and Saemaeul Geumgo, when the loan balance increases for each cooperative, they respond by launching special promotions to increase deposit balances.

The competition for high-interest products is expected to continue for the time being. Major commercial banks are also offering deposits with 4-5% interest rates as well as fixed deposits with interest rates in the 10% range. A mutual finance sector official said, "When commercial banks raise interest rates, there is a continuous atmosphere of interest rate competition to match or exceed that level."