Banks raised deposit rates by up to 0.4% due to the base rate hike.
When the Bank of Korea raised the base rate, major commercial banks raised interest rates on deposits and savings accounts. The increase in customer dissatisfaction due to the widening of the loan-to-deposit interest rate difference is also cited as the reason for the increase in interest rates.
According to the financial industry, when the Monetary Policy Committee of the Bank of Korea raised the base rate by 0.25 percentage points (p) from 0.75% to 1.0% on the 25th, the banking sector quickly raised the interest rate on deposits and savings accounts up to 0.4%p.
An increase in the deposit rate is a natural phenomenon when the base rate rises, but the rate hike process by banks this time is faster than before. When the base rate was raised in August, the deposit rate was raised in 5-6 days, but this time, it was raised in two days. As the deposit rate can be raised slowly by the bank at its discretion, the effect of changes in the base rate is relatively small compared to the loan rate.
Criticism that the rate of increase in deposit rates is slow and narrow and the pressure of commercial banks by the financial authorities also played a part, while lending rates have risen rapidly in recent years. The Financial Supervisory Service (FSS) announced on the 19th that it would convene the deputy chiefs of commercial banks in charge of credit to review the loan and deposit rate calculation system.
Jeong Eun-bo, head of the Financial Supervisory Service, said, “The difference between the deposit rate and the loan rate is very wide.
Last month, the loan-to-deposit interest rate difference was 2.16%p. Although it expanded by 0.02%p for three consecutive months to 2.12%p in August and 2.14%p in September, the industry predicts that the loan-to-deposit interest rate gap will decrease after November.
A commercial bank official said, “As the controversy over extortion among banks continues, we have raised the deposit interest rate as soon as possible to reduce the voice.” said
Looking at products by bank, Shinhan Bank will raise interest rates for 36 types of time deposits and savings-type deposits by up to 0.40%p starting from the 29th. The typical ‘Hello, Nice to meet you savings’ will increase the interest rate to 4.2% per annum with a maximum maturity of one year, and ‘Shinhan R.Sol Installment Savings’ will have a maximum rate of 2.6% per annum with a one-year maturity. The one-year maturity of the Didim Seed Reserve is changed to 2.05% per annum with the interest rate raised by 0.4%p.
KB Kookmin Bank will raise interest rates for 17 types of time deposits and marketable deposits and 26 types of savings type deposits by up to 0.4%p starting from the 29th. The maximum interest rate based on the 3-year maturity of the representative non-face-to-face exclusive product, ‘KB Family Happiness Savings’, will be changed to 3.10% per annum, and the KB DoubleMoa deposit will be changed to 1.80% per annum for 1 year. In the case of 3-year KB member preferential savings accounts, the highest interest rate is raised from 2.10% a year to 2.50% a year for business preferential savings accounts, and from 2.45% a year to 2.85% a year.
On the same day, Woori Bank also raises interest rates for 19 time deposits and 28 savings products by up to 0.4 percentage points. The maximum interest rate for the representative product, ‘Woori Super’ fixed deposit, from 1.15% per annum to 1.45% per annum, for the ‘Super’ main transaction savings account, is 2.80% per annum, and ‘ESG’ savings account. The highest interest rate is raised to 2.05% per annum.
From the 26th, Hana Bank raised interest rates on five types of savings accounts by 0.25%p to 0.40%p. Hana OneQ savings account rose from 2.30% per annum to a maximum of 2.60% per annum. In addition, from the 29th, interest rates on 7 types of savings-type deposits, including the Challenge 365 savings account, and 6 types of time deposits, including 369 time deposits, will be increased by 0.25%p.
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