As the standard interest rate enters the 2% era, 3% term deposit products are disappearing, but the balance of term deposits at the top five commercial banks (KB Kookmin, Shinhan, Hana, Woori, NH NongHyup) increased significantly last month. With the beginning of a significant decline in the standard interest rate, demand seems to have increased to receive the last remaining 3% deposit interest.
According to the financial sector on the 6th, the balance of term deposits at the top five banks at the end of last month was 938.4 trillion won. This is an increase of 15.7 trillion won from 922.3 trillion won at the end of January. This is the largest increase in six months since an increase of 16.32 trillion won in August of last year.
Generally, demand for bank deposits decreases when interest rates fall. However, the increase in deposit balances, despite the Bank of Korea lowering the standard interest rate to 2.75% in February of last year, appears to be due to the growing demand for the remaining 3% deposit products, known as 'last-minute demand.'
Term deposit products with interest rates in the 3% range are quickly disappearing. Among 12-month maturity term deposits from 19 major banks, only six products remain with an annual interest rate of 3%. According to the consumer portal announced by the Banking Association, as of the 2nd, the interest rates for representative term deposit products at the top five banks (based on 1-year maturity) are between 2.95% and 3.30%. There are now deposit products that cannot enter the 3% range even when including preferential interest rates.
In fact, the 'KB Star Term Deposits' from Kookmin Bank, 'NH Waltz Rotating Deposits' from NongHyup Bank, 'Solleunhan Term Deposits' from Shinhan Bank, and 'Hana Term Deposits' from Hana Bank have a maximum rate of only 2.95% even with preferential interest rates included. The average interest rate of new products sold by each bank last month was between 3.01% and 3.07%.
For term deposit products with a maximum rate of around 3%, meeting the conditions for preferential interest rates is necessary. Among the top five commercial banks, the products that offer interest rates of 3% or more when preferential interest conditions are applied include 'NH Hometown Love Donation Deposit' and 'NH I am Green World Deposit' from NongHyup Bank, but meeting the stringent conditions requires being a donor for hometown love donations, submitting a pledge to reduce greenhouse gases, or simultaneously holding both savings and deposits.
In December, the balance of term deposits at the top five commercial banks decreased significantly by 21.1285 trillion won. At that time, the yields of other investment products, such as Bitcoin and gold investments, were rising, leading to a considerable reduction in deposit balances. However, it seems that in recent times, even other investment products have shown instability, causing demand to shift back to deposits.
For this reason, the balance of regular savings deposits has also slightly increased. As of the end of February, the balance of regular savings deposits was 39.607 trillion won, which is an increase of 871 billion won from 38.9736 trillion won at the end of January. Banks are launching high-interest special savings products, most of which feature very short deposit periods and small deposit amounts.