The financial district of Yeouido in Seoul. (Yonhap)
SEOUL, Sept. 15 (Korea Bizwire) — Amid the upward trend in interest rates, South Korean banks have released a string of high interest rate deposit and installment savings products.
Such products, however, have complicated preferential conditions, making it difficult for depositors to receive the highest interest rate.
Welcome Savings Bank, for instance, released a 12-month short-term deposit product with a preferential interest rate ranging from 1 to 8 percent.
The preferential interest rate is determined by the number of steps taken by depositors during the contract period.
If the number of steps reaches 1 million, depositors can receive a preferential interest rate of 1 percent. Depositors who take 5 million steps can receive a preferential interest rate of 8 percent.
In other words, depositors should walk 15,000 steps a day to receive an interest rate of 8 percent.
Shinhan Bank, in collaboration with food and beverage company Hy, showcased a new installment savings product offering an annual interest rate of up to 11 percent.
To receive a preferential interest rate of one percent, depositors should have not have subscribed to any other installment savings accounts for three months before subscribing to the new product.
To get an additional eight percent interest rate, they should spend more than 200,000 won (US$143) at Hy’s online shopping mall at least five business days before the maturity date.
Industry watchers said the primary reason why banks release high interest rate products with complicated preferential conditions is to reduce the gap between the lending rate and the deposit rate by temporarily raising the average deposit interest rate.
J. S. Shin (js_shin@koreabizwire.com)
