Busan and K Bank deposits reduced one after another
‘Demand for last train’ surges before interest rate cut
According to the financial sector on the 5th, BNK Busan Bank lowered the interest rates on 10 types of deferred deposit products and 9 types of savings deposit products from this day.
For deferred deposits, it was lowered by 0.1 to 0.15 percentage points (p) depending on product and maturity, and for savings deposits, it was lowered by 0.2 to 0.25 percentage points.
Last week, the Bank of Korea’s Monetary Policy Committee decided to cut the base interest rate by a surprise 0.25% point to 3% per annum, which is interpreted as a decision to cut deposit interest rates in the banking sector.
Prior to this, Internet-only bank K Bank lowered the interest rates of two types of savings deposit products by 0.3% on the 2nd, and the interest rate of its core deposit product, ‘Code K Term Deposit’ (based on 1-year maturity), also decreased to 3.20 from the 3rd. % was lowered by 0.1% point from 3.10%.
This is the effect of a decline in market interest rates due to a cut in the base interest rate.
According to the Korea Financial Investment Association, the interest rate on one-year financial bonds (bank bonds, AAA) was 2.997% as of the 3rd (2.997% as of the 4th).
Although deposit interest rates are falling,deposit and savings balances at major banks have increased.
As of the end of last month, the deposit and savings balance of the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) was KRW 987.7607 trillion, an increase of KRW 6.8298 trillion from KRW 980.9309 trillion the previous month.
It is interpreted that the so-called ‘last-minute demand’ has gathered before deposit interest rates fall further.
An official from the banking industry said, “As interest rates are in a downward trend, there seems to have been a lot of demand, especially for deposits and savings, before they fall further.”
Korea Federation of Banks, the difference in interest rates between deposits and loans for new household loans last month, excluding policy microfinance, was 1.04%. The difference between bank deposit and loan interest rates has been rising for three consecutive months, exceeding 1% last month, following 0.43% in July, 0.57% in August, and 0.734% in september.
(Seoul = News 1)
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