The highest fixed deposit rate at regional banks has surpassed 4% annually, reaching up to 4.2%. As funds have poured into the five major banks that raised their deposit rates this month, regional banks are also accelerating their rate competition.
According to financial industry sources on the 19th, Busan Bank launched the "Only One Main Account Preferred Deposit" on the same day, offering a maximum interest rate of 4.2%. The product adds a preferred rate of up to 1.3 percentage points (p) based on factors such as individual customer transaction records, on top of a base rate of 2.9%. The deposit term is 12 months, with a maximum subscription limit of 100 million won per person.
However, the conditions for receiving the highest rate are relatively complex. Salary earners can receive the preferred rate based on salary transfer and individual retirement pension (IRP) contribution records, while self-employed individuals can qualify based on merchant payment deposit records and new enrollment in the Yellow Umbrella Mutual Aid scheme. There are also common preferred conditions such as average balance in group accounts and credit/check card usage records.
In addition to this product, regional banks have collectively raised deposit rates since last week, with most offering 4% range fixed deposits that do not require special preferred conditions other than being a new customer. First, Gyeongnam Bank has also raised its rate by 0.25%p since the 14th, applying 4.1% to "The Steady Deposit (Season 2)" and 4% to "The Partner Deposit."
Gwangju Bank also began a "Digital Deposit" interest rate event on the 16th. Customers eligible for first-transaction preferences can receive an interest rate of 4.05% if they deposit 100 million won or more with a 12-month maturity. Busan Bank is offering 4.05% on its "The Special Fixed Deposit" based on a 12-month term.
Additionally, the maximum 12-month interest rates for Jeju Bank's "J Fixed Deposit" and Jeonbuk Bank's "JB 123 Fixed Deposit" are 3.99% and 3.93%, respectively, approaching 4% annually.
The background behind regional banks raising their rates is the concentration of deposits in the five major banks. As of the 16th, the fixed deposit balance at the five major banks—KB Kookmin, Shinhan, Hana, Woori, and NH NongHyup—stood at 102.41406 trillion won, an increase of 1.11943 trillion won from the end of September. This exceeded the monthly increase for September, which was 771.44 billion won, by 45% in just over two weeks.
It is interpreted that inflows have accelerated as the five major banks collectively raised deposit rates this month. Shinhan Bank launched the "Super SOL Welcome Fixed Deposit" on the 6th, offering a maximum annual interest rate of 4%. NH NongHyup Bank also released the "NH Olleh Bank 10th Anniversary Deposit," offering up to 3.9% annually, on the 13th.
However, these special sales have set sales and subscription limits. The Shinhan Bank product is being sold on a first-come, first-served basis with a total limit of 500 billion won, and the individual subscription limit is 20 million won. The NongHyup Bank product also has a total sales limit of 500 billion won.
In general fixed deposits, the interest rate advantage of regional banks is clear. The maximum 12-month interest rates for KB Kookmin Bank's "KB Star Fixed Deposit," Woori Bank's "WON Plus Deposit," and Hana Bank's "Hana-ui Fixed Deposit" are 3.6% annually. This is 0.45 to 0.5%p lower than the 4.05% to 4.1% products offered by regional banks. If one deposits 100 million won for one year, the difference in pre-tax interest is approximately 450,000 to 500,000 won.
A source at a regional bank stated, "When commercial banks raise deposit rates, regional banks must secure rate competitiveness to prevent customer outflow and attract new funds," adding, "We are also paying attention to ensuring customers can receive benefits without complex transaction record conditions, in addition to interest rates."
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