The Season of 'Money Move'... Parking Accounts Regain Attention

Interest in CMA Grows Amid Stock Market Boom

As the investment asset markets such as stocks and virtual assets show a booming trend, interest in demand deposit accounts (commonly known as 'parking accounts'), which can be considered as investment standby products, is rising again. Although products offering high interest rates around 4% have disappeared due to the market interest rate cuts, products offering mid-3% interest rates higher than regular savings and time deposits are still popular.

According to the financial sector on the 2nd, SC First Bank is holding an event until the end of this month, offering first-time customers who open a daily compound interest savings deposit (MMDA) at branches (with deposits between 30 million KRW and 2 billion KRW) a special interest rate benefit of up to 3.50% per annum on the daily balance for up to 60 days from the new transaction date.

This product, a demand deposit, pays interest compounded daily based on the daily balance. The advantage is that the larger the deposit amount, the higher the interest rate received. The total recruitment limit is 100 billion KRW. SC First Bank explained, "Due to high demand for products that allow enjoying high interest benefits in a short period, we prepared this event."

Jeonbuk Bank is also attracting investment standby funds with its parking account called 'Seedmoa Account.' This product offers a basic interest rate of 2.80% per annum plus an additional preferential interest rate of 0.60 percentage points per annum for three months. This includes 0.50 percentage points for new customers and 0.10 percentage points for customers who agree to marketing use of their information.

Savings banks are also active in offering high-interest parking account products. For example, Acuon Savings Bank’s Plus Free Deposit offers a basic interest rate of 3.50% per annum, and if the deposit balance is 20 million KRW or less, preferential interest rates of 0.1 percentage points each are provided for agreeing to personal information collection/use (for marketing purposes) and joining the Acuon Membership Plus.

Daol Savings Bank’s 'Fi ConnectⅡ Account' offers an interest rate of 2.80% per annum, but its preferential conditions are relatively simple. First-time customers receive an additional 0.2 percentage points, and registering accounts with commercial banks or securities companies via open banking grants an additional 0.5 percentage points preferential interest rate. Additionally, OK Savings Bank’s OK Jjantech Account applies an interest rate of 7.00% per annum for amounts up to 500,000 KRW, 3.33% per annum for amounts up to 100 million KRW, and 1.0% per annum for amounts exceeding 100 million KRW.

Riding the boom in the stock market, securities firms’ Comprehensive Asset Management Accounts (CMA) are also aiming for a comeback. Mirae Asset Securities’ CMA-RP Naver Account (RP type) offers a 3.55% annual yield for balances up to 10 million KRW for one year. Woori Comprehensive Finance’s Woori WON (WON) CMA Note (financial investment type) also applies an interest rate of 3.60% per annum for the same amount. Securities firms’ CMAs allow free deposits and withdrawals and pay interest daily, enabling compound investment effects, making them strong competitors to deposit-taking institutions’ parking accounts.

The increase in financial technology enthusiasts focusing on parking accounts is due to the recent boom in investment asset markets such as stocks and virtual currencies. The interest rates for one-year fixed deposits at the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) are also at a level of 3.45~3.52%, making them less attractive. A financial sector official said, "Since the U.S. Federal Reserve (Fed) has signaled an interest rate cut in the second half of the year, the possibility of a dramatic rise in deposit interest rates in the near term is low," adding, "As expectations for the asset market grow, parking accounts could be a strong alternative for investment standby funds."