"Putting money into a 2.85% annual deposit?" Banks raise rates by 0.1 percentage point amid stock market money move

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[The Financial News] As the so-called "money move" from deposits to the stock market has intensified recently, banks have been raising deposit rates one after another in a bid to retain customer funds.
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According to Yonhap News Agency on the 18th, KB Kookmin Bank will raise the rate on its flagship deposit product, the "KB Star Time Deposit," by up to 0.1 percentage point starting that day. As a result, deposits with maturities of three months or more but less than six months will rise by 0.1 percentage point, from 2.65% a year to 2.75%. Deposits with maturities of six months or more but less than nine months will increase to 2.80%, while those with maturities of nine months or more but less than 12 months will rise to 2.85%, both up by 0.05 percentage point.
A KB Kookmin Bank official said, "We adjust deposit rates in line with changes in the base rate and market rates, and we decided to raise rates in some maturity bands in response to additional funding conditions."
Woori Bank also decided to raise the rate on its main deposit product, the "Woori One Plus Deposit," by up to 0.1 percentage point starting on the 19th. The rate on three-month deposits will rise from 2.65% a year to 2.75%, while the six-month deposit rate will increase from 2.80% to 2.85%.
The bank will also widen the preferential rate spread for its "Inclusive Finance" mortgage loan program. Based on a five-year floating rate, the preferential rate previously offered at 0.30 percentage point in the Seoul metropolitan area and 0.50 percentage point in non-metropolitan areas will be raised to 1.10 percentage point in both cases. The change applies when a homeowner without a house takes out a loan to buy an apartment, or when a one-home owner borrows for living expenses, provided the borrower chooses an amortizing repayment plan and a five-year floating rate.
Earlier, Hana Bank also raised the rate on its three-month time deposit by 0.1 percentage point, from 2.65% a year to 2.75%, on the 11th. However, while it increased the six-month rate by 0.05 percentage point, from 2.80% to 2.85%, it kept the 12-month rate unchanged.
Internet-only lender KakaoBank Corp also raised the rates on major deposit products, including time deposits and installment savings accounts, by up to 0.1 percentage point starting on the 16th. The 12-month time deposit rate rose from 3.10% a year to 3.20%, and the 12-month installment savings rate increased from 3.25% to 3.35%.
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Other banks are also reportedly reviewing deposit rate hikes. A commercial bank official said, "Youth Future Savings will be launched in June," adding, "As the balance of installment savings held by banks is declining, rate competition could expand further."
Youth Future Savings is known to offer a major advantage over existing bank products, with a three-year fixed rate that applies a base rate of 5% plus an additional preferential rate of 2% to 3% from each institution, bringing the total to as much as 7% to 8%.
bng@fnnews.com Kim Hee-sun Reporter