Although the interest rate on parking accounts (demand deposit accounts) has significantly dropped to just 2%, investment waiting funds are flowing into these accounts as the asset market fluctuates. The highest interest rate for parking accounts among the five major banks (Korea's KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NH Nonghyup Bank) is now difficult to find even in the 3% range. Since interest can be earned even if funds are deposited for just one day, parking accounts remained popular despite the drop in deposit interest rates. However, with the onset of an actual interest rate increase, it is now analyzed that money is coming in more due to a lack of available options rather than to earn higher interest.
According to the Korea Federation of Banks on the 17th, the average interest rate for 39 parking accounts (flexible deposits) sold nationwide was only 2.03% per year. Excluding Kakao Bank's 'Piggy Bank' savings product, which has the highest interest rate of 8.0%, and K Bank's 'Meeting Fee Plus' account, the rates remained in the 1% range.
As deposit interest rates at commercial banks have recently fallen, the parking account rates have also dropped, causing depositors, referred to as 'Yetech people' (savings + financial technology), to lose their way. With the highest interest rate among commercial banks dropping to mid-3% levels, the maximum rate for parking accounts at the major banks barely holds at 3%. Looking at the interest rates for flexible deposits at the five major banks (KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NH Nonghyup), only NH Nonghyup Bank's 'NH 1934 Preferential Account' offers an inclusive preferential rate that keeps it at around 3%, while Woori Bank's 'WON Account' has a maximum rate of only 0.1%.
In the past year, there was a surge in demand for high-interest parking accounts. Particularly, savings banks maintained higher parking account rates than commercial banks to attract customers, as a slightly higher interest rate is more appealing. However, with the recent influx of demand for parking accounts, savings banks are also lowering their rates.
In fact, Shinhan Savings Bank lowered its 'Innovative Parking Account' rate for amounts below 100 million won from 3.1% to 3.0% on the 7th. IBK Savings Bank also reduced the rate for its 'IBKSB e-Parking Account' for amounts below 100 million won from 3.2% to 3.1% on the 2nd.
Despite this situation, it appears that funds in parking accounts increased last year. According to the Bank of Korea's 'November 2024 Monetary and Liquidity Report', the balance of demand deposits rose by 11.4 trillion won in November last year alone. This increase was nearly three times larger than the previous month's increase of 4 trillion won. The Bank of Korea explained that this rise was due to an increase in investment waiting funds resulting from enhanced volatility in the asset market.
Seo Ji-yong, a professor at Sangmyung University, noted, "The influx of funds into some 3% interest products like savings bank parking accounts indicates that capital has been pooled together as it seeks investment opportunities. Given the poor state of the domestic stock market, significantly low yields on savings, and the burdensome nature of investing in high-risk products, these funds have converged into waiting capital."
However, Professor Seo stated, "Depending on how interest rates change in the future, the scale of this waiting fund may vary." He added, "Although market interest rates have fallen significantly recently, the prospects for a rise due to increasing U.S. Treasury yields could lead these funds to re-enter marketable products."