Attract Customers Begins
The Bank of Korea increased the standard interest for the first time in six years and five months, and commercial banks followed suit and began increasing their deposit and savings account interest rates.
The biggest interest lies on where the funds of 1 quadrillion won in the market will shift to.
Jung Joo-hee has more.
The deposits and savings account interest rates, which were practically a minus considering increasing prices, have been increasing gradually thanks to the standard interest rate increasing for the first time in six years and five months.
Woori Bank made the first move.
It increased its deposits and savings account interest rates by 0.3 percent right after the Bank of Korea's announcement on increased standard interest.
KEB Hana Bank is also planning to increase its deposit interests early this week and Shinhan Bank, KB Bank, NH Bank are all planning to increase their deposit interest rates within this week as well.
K Bank, which is an internet bank, increased its deposits and savings account interest rates by 0.2 percent as it joined the line of banks increasing interest rates.
The competition between banks to attract customers has begun and a massive shift in funds is projected as well.
<Kim Jeong-shik / Professor of Economics Department at Yonsei University > “If the interest rate continues to rise, the price of real estate declines slightly, which in turn increases the rate of return for deposits...”
On the other hand, the interest rate for mortgage loans decreased by 0.07 to 0.08 percent compared with the previous week after the increase in the standard interest rate.
This is because the signal for the raising standard interest rate came from the Monetary Policy Committee in October, resulting in the market interest rate increasing, which was reflected on the interest rates for loans. The Bank of Korea has remained cautious towards increasing the interest rate next year.
But if the interest rates on savings increase, the fundraising expenses for banks increase as well, and this can cause interest rates for loans to rise soon as well.
This is the reason why the burden on household debt repayment of 1.4 quadrillion won would increase with the rise of interest rates.
Jung Joo-hee reporting for Yonhap News TV.
Yonhap News TV: 02-398-4441 (Inquiry on article/Report) KakaoTalk/LINE jebo23