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Interest rates for time deposits rise to 32-month high

All News 11:22 December 31, 2017

SEOUL, Dec. 31 (Yonhap) -- Annual interest rates for time deposits climbed to their highest in 32 months in November, reaching nearly 2 percent, data showed Sunday.

The average interest rate for one-year maturity time deposits came to 1.96 percent in November, the highest since the 2.01 percent in March 2015, according to the data. It marks a 0.17 percentage-point hike from October and a 0.4 percentage-point jump over the previous four months.

Interest rates for all time deposits rose 0.15 percentage point to 1.74 percent in November, up 0.31 percentage point over the prior four months.

Interest rates started to edge up before the Bank of Korea raised the key rate. The central bank hiked the rate by a quarter percentage point on Nov. 30.

Same data showed that 40 percent of time deposits sold in November came with an interest rate in the 2 percent range, the highest since February 2015.

Non-banking institutions were the earliest to offer higher interests. Savings banks have given 2.4 percent on time deposits since September. The National Credit Union Federation and MG Community Credit Cooperatives were offering 2.18 percent and 2.1 percent, respectively, in November.

The balance of time deposits at local lenders has been on the rise this year, increasing at the fastest pace in six years through October. The amount totaled 622.37 trillion won (US$582.47 billion) as of end-October, up 6 percent from last year's close, according to the data.

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