Major South Korean banks raised deposit interest rates to the 3% range starting from the 21st through 24th, following central bank rate hikes. Hana Bank increased its 1-year regular deposit rate to 3.20% from the 23rd, up 30 basis points from the 2.90% rate applied since March. This marks the first time annual deposit rates have reached the 3% level in 1 year and 5 months, as banks adjust pricing in response to benchmark rate increases.
Major Banks Raise 1-Year Deposit Rates to 3.20%
Shinhan Bank adjusted its 1-year "Sol Convenient Regular Deposit" rate to 3.2% from 2.9% starting the 21st, according to the financial sector on the 26th. The bank also raised base rates for lump-sum deposits by 0.2-0.4 percentage points and installment deposits by 0.1-0.3 percentage points. Special promotion deposits running until the end of this month offer maximum rates of 3.3% annually.
KB Kookmin Bank raised rates on major deposit and savings products by up to 0.30%. Regular savings rates were adjusted upward by 0.20-0.30% starting the 24th. The bank's flagship non-face-to-face product "KB Star Regular Deposit" now offers 3.20% for 1-year maturity. Maximum rates on savings products for vulnerable social groups reached 5.70% annually.
Woori Bank increased base rates on demand deposit products by 0.25% annually and raised base rates for lump-sum and installment products by 0.30%. The bank's flagship "WON Plus Deposit" rate rose from 2.90% to 3.20% annually.
Internet and Savings Banks Push Rates Above 3.6%
Internet banks led the rate increase trend, forming deposit rates in the mid-to-high 3% range. K Bank raised its 1-year regular deposit rate from 3.61% to 3.71% annually, while Kakao Bank adjusted rates upward from 3.4% to 3.6%.
Savings bank deposit rates also showed an upward trend. According to the Savings Banks Central Association consumer portal, the sector's regular deposit rate for 12-month maturity stood at 3.88% annually as of the 23rd, based on industry averages. This represents a 70 basis point increase compared to the end of March.
Investor Deposits Drop 25 Trillion Won Since May
Investor deposits totaled 106.69 trillion won as of the 21st, according to the Korea Financial Investment Association. Compared to the 131.5 trillion won deposited in late May, deposits decreased by nearly 25 trillion won over two months. Market observers suggest that funds previously moved to stock markets may flow back to deposits and savings products due to higher deposit rates and stock market volatility.
A banking sector official stated, "Deposit product rates in the banking sector have risen following the Bank of Korea's benchmark rate hike and market interest rate increases." The official explained, "As additional rate hikes are predicted within the year, deposit product rates are likely to follow suit."
FAQ
What deposit rate did Hana Bank announce on the 23rd?
Hana Bank raised its 1-year regular deposit rate to 3.20% from the 23rd, up 30 basis points from the 2.90% rate that had been applied since March.
How much did investor deposits decrease between May and the 21st?
Investor deposits dropped from 131.5 trillion won in late May to 106.69 trillion won as of the 21st, a decrease of nearly 25 trillion won over approximately two months.
What is the current average savings bank deposit rate for 12-month maturity?
As of the 23rd, the savings bank sector's average regular deposit rate for 12-month maturity stood at 3.88% annually, representing a 70 basis point increase from the end of March.
