[Money Flowing into Savings and Deposits]② Simple Products with 'No Complex Preferential Conditions' Are Emerging

Office worker Yuseonghwan (36) tilted his head in confusion after the maturity of a time deposit product he had last year, noticing the interest rate was different from what he first saw. He expected an annual interest rate of 5.4% by meeting several preferential conditions, but the rate applied at maturity was 5.3% per year because he did not submit a specific pledge form. Mr. Yu said, "There were too many and complicated preferential conditions, so I think I forgot one."

On the 9th, when major commercial banks lowered their fixed deposit interest rates from the 5% range to the 4% range, the fixed deposit interest rates were displayed on an electronic board at the entrance of a bank in Seoul. Photo by Jinhyung Kang aymsdream@

Recently, financial institutions have been launching savings and time deposit products with simplified preferential interest rate conditions. As there have been ongoing criticisms that the requirements for preferential interest rates on savings and time deposits are difficult to meet, financial consumers are paying attention.

According to the financial sector on the 1st, Shinhan Bank recently launched the 'Shinhan My (My) Plus Time Deposit' product with simplified preferential conditions. This product, which allows deposits from a minimum of 500,000 KRW to 100 million KRW, offers a high interest rate of up to 3.95% per annum (12-month maturity) compared to recent deposit products from commercial banks.

There is a 0.2% preferential interest rate, but meeting the conditions is relatively easy. If you have not held a time deposit at Shinhan Bank in the past six months, you receive an additional 0.1% per annum, and if you deposit more than 500,000 KRW into a Shinhan Bank checking or savings account during the deposit period, you get an additional 0.1%. Transfers between your own Shinhan Bank accounts are excluded, and for products with a term of six months or more, you only need to make deposits three times or more.

In addition, among savings banks, SangSangin Savings Bank offers a '9-month revolving time deposit,' and OK Savings Bank provides the 'OK e-Plus Time Deposit,' each offering interest rates of 4.2% and 4.41% per annum respectively without separate preferential conditions.

Toss Bank's free savings product is also gaining popularity due to its high interest rate level and relatively simple preferential conditions. The basic interest rate of Toss Bank's free savings is about 3% per annum, which is not high, but if you successfully make automatic transfers on a set day each month, you receive a total interest rate of 5% per annum (12 months), including a 2% preferential interest rate. The maximum monthly deposit amount is also generous at 3 million KRW.

Of course, recently, as financial institutions compete to secure deposits, savings products with interest rates of 6-10% per annum have also appeared, but these products require continuous fulfillment of preferential conditions during the subscription period or additional subscription to specific financial products, among other restrictions. Some products have relatively small maximum monthly deposit amounts, leading to criticism that they are essentially bait products.

Therefore, financial products with simplified preferential conditions are quite popular among the investment-savvy. Toss Bank's free savings product surpassed 100,000 accounts within nine days of launch, averaging one subscription every eight seconds. Notably, 58.6% of subscribers were in their 20s and 30s.

Complicated preferential interest rate conditions are a concern not only for financial consumers but also for authorities. As consumer complaints increased due to complex preferential conditions during the interest rate hike period, the Financial Supervisory Service issued consumer advisories in April and announced that it would conduct on-site inspections if necessary and discuss improvements with the industry.