South Korean Savings Banks Boost Deposit Rates Amidst Stock Market Inflows

South Korean savings banks are intensifying competition for deposits by raising interest rates on both parking accounts and term deposits, driven by increased market liquidity and growing funds awaiting investment in the stock market.

Rising Interest Rates on Term Deposits

According to the Korea Federation of Savings Banks, the average interest rate on one-year maturity term deposits at 79 savings banks reached 3.11% as of March 16, 2026, a 0.1 percentage point increase from a month prior (3.01%). Some savings banks are offering annual interest rates in the 3.4% range to attract depositors.

Competitive Parking Account Rates

Competition is likewise fierce for parking accounts, which are designed for short-term funds awaiting investment. OK Savings Bank is aggressively attracting short-term funds with interest rates up to 7% per annum through accounts like OK Chan Tech Account II, OK Peanuts Public Parking Account, and OK Suitman Supporter Account. Welcome Savings Bank has also increased the maximum interest rate for its ‘Welcome Main Account’ from 2.8% to 3%.

Factors Driving the Trend

The increase in funds available for investment is linked to broader economic trends. As of January 2026, South Korea’s broad currency (M2) stood at 4,108.9 trillion won, a 27.7 trillion won increase in one month. This growth in highly liquid financial products, such as cash deposits, foreign currency deposits, and comprehensive asset management accounts (CMAs), has led to a rise in funds waiting for investment opportunities.

Other monetary products with short-term characteristics increased by 21 trillion won, doubling the previous month’s increase. Savings deposits with regular deposits and withdrawals also rose by 15.5 trillion won, indicating a shift of funds towards highly liquid accounts.

Industry Outlook

Industry experts anticipate that this trend will continue as more funds flow into the stock market. A financial sector official stated that the flow of funds is likely to persist, centering on the stock market, and that interest rate-centered deposit competition within the savings and banking industry will continue for the foreseeable future.

Savings Banks Adapt to Market Changes

The Korea Federation of Savings Banks has been actively assisting its members in managing their funds and improving investment profitability. In 2023, the Federation launched ‘SB Info Market,’ a web platform providing investment information from banks, securities firms, and asset management companies, including principal-protected products and fixed-return offerings [1].

More recently, savings banks have been increasing their holdings in marketable securities. As of September 2025, the total balance of marketable securities held by 79 savings banks reached 12.5 trillion won, a 40.5% increase [1].

The savings banking sector is also addressing challenges related to project financing (PF) insolvency by seeking opportunities in “general business” and establishing PF normalization funds [3]. The Korea Federation of Savings Banks is creating 180 billion won worth of PF normalization funds to support savings banks in the real estate PF market.

the Korea Federation of Savings Banks has partnered with online investment-linked financial companies to expand financial supply to mid- and low-credit individuals through linked investments [4].