{"id":20671,"date":"2026-05-18T07:16:07","date_gmt":"2026-05-18T07:16:07","guid":{"rendered":"https:\/\/www.europesays.com\/korea\/20671\/"},"modified":"2026-05-18T07:16:07","modified_gmt":"2026-05-18T07:16:07","slug":"banks-raise-deposit-rates-as-stock-rally-accelerates-cash-exodus","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/korea\/20671\/","title":{"rendered":"Banks raise deposit rates as stock rally accelerates cash exodus"},"content":{"rendered":"

\"Officials<\/p>\n

Officials work at a Hana Bank dealing room in Seoul, Monday, when the benchmark KOSPI index opened at 7,443.29, down 0.67 percent from the previous trading session. Yonhap<\/p>\n

A woman surnamed Park in her 60s living in Seoul’s Yangcheon District closed two time deposit accounts worth a combined 50 million won ($33,000) last month and invested the money in shares of Samsung Electronics and SK hynix, Korea’s two chipmaking giants.<\/p>\n

“I’ve never really been into stocks and usually stick to safer savings products,” she said. “But lately, everyone around me has been talking about making money in the stock market, so I decided to close the deposit accounts I had opened just a few months earlier at KakaoBank and NH NongHyup Bank.”<\/p>\n

She added, “Stock prices have been a little volatile recently, but I still think the returns will be much higher than deposit interest rates, so I don’t regret the decision.” <\/p>\n

An office worker in her 30s surnamed Choi also recently canceled an installment savings account at KakaoBank to invest in stocks.<\/p>\n

“I had been automatically putting 500,000 won into the account every month, but with rates in the low-3 percent range, there’s little to gain after taxes,” Choi said. “I thought I’d rather put the money into stocks instead.”<\/p>\n

Park and Choi are among a growing number of retail investors in Korea who are pulling money out of bank savings products and pouring it into stocks as the benchmark KOSPI continues its strong rally.<\/p>\n

Driven largely by sharp gains in semiconductor shares, the index has surged about 80 percent since the start of the year, fueling growing enthusiasm among retail investors.<\/p>\n

As concerns mount over deposit outflows, banks have begun raising deposit rates in an apparent effort to retain customers, according to industry officials Monday.<\/p>\n

Kookmin Bank raised interest rates on its flagship KB Star Deposit product by up to 0.1 percentage point. The rate for three- to six-month deposits rose to 2.75 percent from 2.65 percent, while the rate for six- to 12-month deposits increased to 2.85 percent from 2.8 percent.<\/p>\n

\"The<\/p>\n

The interior of a commercial bank branch in Seoul, Oct. 15, 2025 \/ Yonhap <\/p>\n

Earlier this month, Hana Bank raised the interest rate on its three-month time deposit product by 0.1 percentage point to 2.75 percent from 2.65 percent. The bank also raised the rate on six-month time deposits by 0.05 percentage point to 2.85 percent from 2.8 percent.<\/p>\n

Internet-only lender KakaoBank also raised rates last week on key deposit products, including time deposits and installment savings accounts, by up to 0.1 percentage point.<\/p>\n

“In addition to trying to retain customers, banks are also taking preemptive measures on expectations that some of the money flowing into stocks could return to deposits in the coming months if the Bank of Korea raises the benchmark interest rate,” a banking industry official said. <\/p>\n

Lenders are also pinning hopes on the government-backed Youth Future Savings Account set to launch in June as a way to attract younger depositors.<\/p>\n

The program will offer government matching contributions and tax benefits to individuals ages 19 to 34 with annual incomes below 60 million won.<\/p>\n

Depending on income level, participants who contribute up to 500,000 won per month for three years can accumulate as much as 22.55 million won through government contributions and tax exemptions.<\/p>\n

A total of 15 lenders, including KB Kookmin Bank, Hana Bank, KakaoBank and Toss Bank, are set to participate in the program amid expectations it will help boost savings inflows.<\/p>\n","protected":false},"excerpt":{"rendered":"Officials work at a Hana Bank dealing room in Seoul, Monday, when the benchmark KOSPI index opened at…\n","protected":false},"author":2,"featured_media":20672,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[456],"tags":[845,846],"class_list":{"0":"post-20671","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-bank-of-korea","8":"tag-bank-of-korea","9":"tag-bok"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/20671","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=20671"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/20671\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/20672"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=20671"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=20671"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=20671"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}