An official checks banknotes at the headquarters of KEB Hana Bank in Seoul on Jan. 7, 2022. (Yonhap)
SEOUL, July 11 (Korea Bizwire) — Short-term saving products are gaining popularity as the stereotype of saving money by pouring money into deposit or installment saving products for more than one year has lost appeal.
KakaoBank Corp., a South Korean internet-only bank, released the ’26 week-long installment saving product’ in June 2018, and the number of such accounts reached 12.28 million by the end of May.
Another internet-only lender Toss Bank introduced its first installment saving product in two types, one for six months and another with free installments. The number of such accounts shot up to 100,000 in just three days.
Commercial banks are also shifting their product groups as short-term deposit and installment saving products gain popularity.
Woori Bank, for instance, added a six-month installment option when it released a regular deposit product. If customers deposit their money just for six months, they can get an interest rate of up to 2.45 percent.
KB Kookmin Bank also allowed customers to select six months or one year when it recently introduced a regular deposit product that offers a different interest rate depending on the account holder’s balance.
The primary factor behind the rising popularity of short-term money-saving products is the shift in financial life patterns.
In the past, people purchased homes or cars by saving money for a long period of time. These types of purchases, however, are becoming impossible in recent days.
Instead, members of today’s MZ generation, those born between the early 1980s and early 2000s, are showing a consumption propensity of saving money for a short period of time and spending the saved money for the purpose they want.
J. S. Shin (js_shin@koreabizwire.com)
