'Parking Account' Craze, Internet Banks Decline as Regional and Savings Banks Gain Attention [1mm Financial Talk]

At one time, the parking account products of internet-only banks, which gained popularity as "demand deposit accounts that pay interest daily," are losing their appeal due to relatively lower interest rates. On the other hand, niche parking account products from savings banks, which need to expand operations after the base rate cut in the second half of the year, and local and small-to-medium-sized banks, which are desperate to secure customers, are gaining popularity.

According to the financial sector on the 13th, K-Bank recently lowered the interest rate applied to deposits of 3 million KRW or less on its representative deposit product, the 'Saenghwal Account,' from 2.0% to 0.1%, a drop of 1.9 percentage points. An interest rate of 0.1% is typically the level applied to regular savings accounts at general banks.

Of course, this is not the first time the interest rate on this product has been reduced. The Saenghwal Account, which combines a parking account and a deposit, initially offered an annual interest rate of 3.0% on amounts up to 3 million KRW at launch. In the early days, maintaining an average monthly balance of over 3 million KRW earned cashback refunds for Coupang's Wow Membership (then 4,990 KRW) and Naver Plus Membership (4,900 KRW), attracting the thrifty finance enthusiasts.

Toss Bank, considered the 'originator' of the parking account craze, currently offers an unlimited parking account interest rate of about 1.8% per annum. Kakao Bank's parking account product, Safe Box, applies an interest rate of 2.0% (for amounts up to 10 million KRW). Although they apply interest to relatively higher deposit amounts, the interest rates themselves are low.

In contrast, parking account products from local banks, small and medium-sized banks, and savings banks are drawing attention with relatively higher interest rates. Among local banks, Jeonbuk Bank's Seed Moa Account, sold to its first customers, pays up to 3.51% annual interest for three months without limit. This consists of a base rate of 2.70% plus a preferential rate of 0.71% for three months if certain conditions are met. This rate surpasses not only internet-only bank products but also the average interest rates of fixed deposit products from the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup), which range from 3.35% to 3.40%. Additionally, SC First Bank's Jeil EZ Account offers a maximum interest rate of 3.1% per annum.

Savings banks are also actively competing to attract parking accounts despite the market interest rate decline. Although the limits are relatively low, ranging from 300,000 to 500,000 KRW, OK Savings Bank's OK Toss Plus Account and Jjantech Account offer interest rates of 7% and 8% per annum, respectively. Equion Savings Bank applies a maximum interest rate of 3.6% per annum on amounts up to 50 million KRW. Other savings banks maintain parking account products with maximum interest rates around 3.2% to 3.3% per annum.

The difference in parking account strategies is explained by the situations each company faces. A financial sector official said, "Internet-only banks that led the initial craze have succeeded in securing customers over time, but local and small-to-medium-sized banks are still lacking," adding, "In the case of savings banks, if interest rates are cut this year, deposits are necessary to actively increase loan assets, and the maturity of past high-interest deposit products is coming due at the end of the year, which seems to be the reason for actively selling parking accounts."