As the stock market repeatedly surges and plunges, intensifying the ‘Roller-KOSPI’ pattern, interest is once again rising in time deposits as a safe asset. With a Bank of Korea base-rate hike signaled, it has recently become easy to find bank products with top rates in the high 3% per annum. Among savings-bank time deposits, offerings exceeding 4% per annum are increasing.

According to the Korea Federation of Banks’ consumer portal, as of the 8th, the one-year time deposit with the highest rate among banks was SC Jeil Bank’s ‘e-Green Save Deposit,’ with a top rate (including preferential rates, etc.) of 3.85% per annum.

Gwangju Bank’s ‘Good Start Deposit’ offers a top rate of 3.83% per annum, and internet bank K Bank’s ‘Code K Time Deposit’ is set at 3.61% per annum for both base and top rates. Among the five major commercial banksKB Kookmin, Shinhan, Hana, Woori, and NH NonghyupShinhan Bank’s ‘Shinhan My Plus Time Deposit’ had the highest top rate at 3.30% per annum.

Banks have been raising deposit rates to reflect rising market rates amid expectations of a Bank of Korea base-rate hike. According to the Bank of Korea’s Economic Statistics System, the average rate on one-year time deposits at deposit banks already surpassed 3% per annum in April. On top of that, banks also raised deposit rates competitively to stem outflows to the stock market.

Savings banks, which are relatively vulnerable to fund outflows, are rolling out high-rate deposit products more aggressively. According to the Korea Federation of Savings Banks’ consumer portal, as of the day the average rate on one-year time deposits is 3.95% per annum, more than 1 percentage point higher than at the end of last year (2.92% per annum). The number of time-deposit products offering top rates of 4% or higher has exceeded 160.

A savings-bank industry official said, “Even when we raise rates to the same extent as in the past, the volume of incoming funds has shrunk,” adding, “We are raising rates to prevent funds from leaving for the investment market.”

Since last year, a ‘money move’ has seen funds shift from deposits to stocks, but recently money appears to be flowing back into time deposits. In the banking sector, some expect deposit rates could rise further, given the possibility of a Bank of Korea base-rate hike this month.

The balance of time deposits at the five major banks rose by 7.5327 trillion won from 937.1834 trillion won in April to 944.7161 trillion won in May, and then increased by another 4.6837 trillion won to 949.3998 trillion won at the end of last month.

Banks analyzed that this was due to companies depositing surplus cash thanks to strong exports such as semiconductors, along with increased customer demand returning from the stock market to deposits.

A commercial bank official said, “With stock-market volatility increasing recently, there seems to be demand to shift funds toward banks.” Another commercial bank official, however, said, “For now, it is merely at the level of defending against outflows.”