[Money Movement]② Hot Savings and Time Deposits Again... Secondary Financial Institutions Introduce Products with 10% Interest Rates

As bank deposit interest rates begin to rise, promotional flyers advertising high-interest savings products are displayed at the Central Post Office in Jung-gu, Seoul, on the 9th. Photo by Jinhyung Kang aymsdream@

As bank deposit interest rates begin to rise, more people are once again seeking savings and fixed deposit products. The balance of fixed savings and deposits at the five major commercial banks increased by more than 11 trillion won in just one month. In the mutual finance sector, including Saemaeul Geumgo, high-interest special savings products have been released, leading to repeated 'sold-out' situations.

Commercial Bank Fixed Deposits Approaching 4%

[Image source=Yonhap News]

According to the Bankers Association on the 8th, the interest rates for major fixed deposit products at the five major banks?KB Kookmin, Shinhan, Hana, NH Nonghyup, and others?are around 3.65% to 3.85% (based on 12 months), nearing the 4% range. According to the Bank of Korea, the average deposit interest rate at deposit banks rose from 3.42% in March to 3.56% in May, and then returned to 3.69% in June.

It is already not difficult to find products with interest rates exceeding 4%. For example, Woori Bank's 'Woori First Transaction Preferential Fixed Deposit' offers an annual interest rate of up to 4.10% if preferential conditions are met. SC First Bank's 'e-Green Save Deposit' offers up to 4.1% annually, BNK Busan Bank's 'The Special Fixed Deposit', and Sh Suhyup Bank's 'Sh First Meeting Preferential Deposit' offer up to 4.0% and 4.02% annually, respectively.

As banks reintroduce high-interest products, deposit balances have also increased significantly. Last month, the fixed deposit balance at the five major banks was 832.9812 trillion won, an increase of 10.707 trillion won from the previous month (822.2742 trillion won), maintaining a growth trend for four consecutive months. Fixed savings also increased by 1.1679 trillion won from 40.0841 trillion won to 41.252 trillion won.

10% Interest Savings Products Appear in Secondary Financial Sector

High-interest special savings products have also appeared in the secondary financial sector. Shinhan Card launched the 'Post Office Shinhan Ujeong Savings' on the 1st, offering an annual interest rate of up to 10.15%. The deposit period is 12 months, with a monthly deposit limit of up to 300,000 won. If the savings are maintained until maturity, the basic interest rate of 2.7% is provided, and an additional 0.45 percentage points of preferential interest from the Post Office is added when conditions such as automatic transfer payments through the 'Post Office Shinhan Ujeong Savings' are met. If Shinhan Card usage conditions are fulfilled, an additional special reward of 7 percentage points provided by Shinhan Card is applied.

Additionally, Saemaeul Geumgo offers some savings products with interest rates up to 10% (for 12 months or longer) at certain branches. According to the Saemaeul Geumgo Central Association's website disclosure, The Joeun Saemaeul Geumgo located in Dongdaemun-gu, Seoul, is currently running a special fixed savings promotion with a 10.5% interest rate. Other branches such as Yongsan Saemaeul Geumgo and Dapsimni Saemaeul Geumgo are also conducting 10% fixed savings special promotions, and Gwangdeok Saemaeul Geumgo in Cheonan, Chungnam, offers a 10% interest rate special savings product. However, preferential conditions such as in-person subscription and membership in mutual aid associations must be confirmed.

Savings banks such as OK Savings Bank, JT Savings Bank, and JT Chinhae Savings Bank have been raising their 6-month fixed deposit interest rates one after another. OK Savings Bank raised the interest rate for its representative fixed deposit product, 'OK e-Fixed Deposit,' by 0.81 percentage points for 6-month subscriptions starting from the 7th, applying an annual rate of 4.31% (before tax). JT Chinhae Savings Bank also announced on the same day that it would raise the 6-month fixed deposit interest rate by 0.4 percentage points to 4.4% annually. JT Savings Bank increased the 6-month face-to-face and non-face-to-face fixed deposit interest rates by 1.7 percentage points and 1.75 percentage points, respectively, offering 4.2% and 4.3% annually.

According to the Savings Banks Association disclosure, as of the previous day, the average interest rate for 6-month fixed deposits at all 79 savings banks was 3.07% annually, up 0.2 percentage points from 2.87% on the same day last month. This increase is larger than the 0.08 percentage point rise in the interest rate for 12-month fixed deposit products, classified as long-term fixed deposits, during the same period (from 3.97% to 4.05% annually).

A mutual finance sector official said, "As the maturity dates of special promotions that started last year approach, some cooperatives are launching new special promotions, leading to an increase in high-interest products. However, it is advisable to check preferential conditions by contacting the respective cooperative or branch before subscribing."