Due to Rapid Rise in Stocks and Coins... Savings and Time Deposits Decrease by 10 Trillion Won in One Month

The balance of regular savings and time deposits at major commercial banks has decreased by more than 10 trillion won in just one month. This is attributed to the fact that bank deposit interest rates remain at the base rate level (3.50%), while the virtual asset market and stock market have been volatile since the beginning of the year.

According to the financial sector on the 1st, as of the 27th of last month, the balance of regular savings and time deposits at the five major domestic commercial banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) was 908.4067 trillion won. This is a decrease of 11.0638 trillion won (1.20%) compared to the end of the previous month (919.4705 trillion won).

Breaking it down, the balance of time deposits was 877.071 trillion won, down 9.1791 trillion won (1.04%) from the previous month. Regular savings deposits were 31.3357 trillion won, decreasing by 1.8847 trillion won (5.67%), showing a relatively larger decline.

The primary reason for the decrease in deposits such as savings and time deposits at major banks in March is considered to be seasonal factors. March is a period when major events such as moving and school admissions are concentrated, naturally increasing household demand for funds.

However, above all, the booming virtual asset and stock markets are also pointed out as a cause. At the beginning of the year, the price of Bitcoin was $44,172 per 1 BTC, but it soared to $71,475.90 in mid-last month, representing a 61.81% increase. On Upbit, a domestic virtual asset exchange, the price of Bitcoin was maintained at around 101 million won as of the morning of the 29th of last month.

The stock market is also showing signs of recovery. The KOSPI index, which had fallen to 2435.9 in mid-January this year, continued to rise after the government announced its corporate value-up program, reaching 2746.63 on March 29. Idle funds also seem to be flowing into the stock market. According to the Korea Financial Investment Association, investor deposits, which remained at 50.7434 trillion won at the end of January, surged to 54.3356 trillion won at the end of February and increased by nearly 1 trillion won to 55.323 trillion won on March 27.

Additionally, it has been reported that the decrease in corporate savings and time deposit balances is continuing. The industry explains that as the economy worsens and relatively high interest rates persist, some companies are using deposits to proactively repay debts.

On the other hand, the attractiveness of savings and time deposits is diminishing. This is due to the stabilization of market interest rates as the U.S. Federal Reserve (Fed) signals the end of tightening. The interest rates on time deposits at the five major commercial banks remained at around 3.45?3.55%. Deposit interest rates, which maintained around 4% until the end of last year, continue to decline. This does not even reach the yield of comprehensive asset management account (CMA) products offered by securities firms, which offer up to 3.60% annually.

A representative from a commercial bank said, "Looking at the trend over the past three months, the KOSPI and gold prices have continued to rise, and the virtual asset market, including Bitcoin, is also heating up, so it is estimated that a considerable amount of funds has moved to investment asset markets. However, since the balance of savings and time deposits fluctuates significantly month to month, it is necessary to observe whether this trend will continue."