As the KOSPI index plunged from the 9,000s to the 6,000s in two months, the balance of time deposits at commercial banks increased by more than 6 trillion won. In particular, short-term deposit products that make it easy to move money back into the stock market at any time are gaining popularity.
According to the banking sector on the 11th, the balance of time deposits at the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH NongHyup) was 974.349 trillion won as of the end of July, up 24.9492 trillion won from the end of June. It is the largest increase since the one-month period from the end of September to the end of October 2022, when it rose by 47.7231 trillion won.
Among time deposits, money is flowing into short-term deposit products with maturities of about three to six months. According to the Bank of Korea's Economic Statistics System (ECOS), as of the end of May this year, the balance of time deposits with maturities under six months was 234 trillion won, up 38 trillion won in a year. During the same period, the balance of time deposits with maturities of six months or more and under one year fell from 225 trillion won to 189 trillion won, a decrease of 36 trillion won.
In the banking sector, some say investors have found their own strategies while watching the "roller KOSPI," which repeatedly surges and plunges. With the recent downturn persisting, they are stepping back from the stock market for now, but parking funds in short-term deposits so they can resume investing at any time when a rally comes.
By contrast, installment savings products are losing popularity. As of the end of July, the balance of installment savings at the five major banks was 45.0023 trillion won, down 1.9179 trillion won from the end of June.
Currently, the average deposit interest rate at commercial banks is in the low-to-mid 3% range, and the interest rate for installment savings is slightly higher, in the mid-to-high 3% range. A banking industry official said, "Given the product structure, installment savings are hard to withdraw immediately, and if you cancel before maturity, the interest rate is cut sharply, so the higher rate compared with deposit products does not mean much."