[Yonhap News Photo, DB]

Banks are engaged in a competition to retain customer funds by successively raising deposit interest rates.

This is seen as a response to the trend of money moving from deposits to the stock market, known as "money move." There is also an anticipation of the impact from the launch of the "Youth Future Savings" product scheduled for next month.

According to financial circles on the 18th, KB Kookmin Bank will increase the interest rate on its flagship deposit product, "KB Star Time Deposit," by up to 0.1 percentage points (p) starting today.

Consequently, the deposit interest rate for maturities of 3 months or more but less than 6 months will rise from 2.65% to 2.75% per annum, an increase of 0.1%p. Additionally, for maturities of 6 months or more but less than 9 months, and for maturities of 9 months or more but less than 12 months, the rates will increase by 0.05%p to 2.85% per annum, respectively.

A KB Kookmin Bank official stated, "We are adjusting deposit interest rates in response to changes in benchmark and market interest rates, and we have decided to increase rates in some segments due to changes in additional funding conditions."

Separately, KB Kookmin Bank has decided to increase the interest rates for its housing mortgage loans (fixed/hybrid) by 0.16%p, reflecting the recent rise in the benchmark 5-year financial bond rate.

Woori Bank has also decided to increase the interest rate on its main deposit product, "Woori Won Plus Deposit," by up to 0.1%p starting on the 19th.

The interest rate for 3-month maturity deposits will be raised from 2.65% to 2.75% per annum, and the interest rate for 6-month maturity deposits will be increased from 2.80% to 2.85% per annum.

Furthermore, the bank has decided to expand the preferential interest rate for its "Inclusive Finance" program, which is offered for apartment mortgage loans.

Under the 5-year variable rate, the preferential rate, which was previously 0.30%p for the Seoul metropolitan area and 0.50%p for other regions, will be uniformly increased to 1.10%p.

The interest rate benefit applies to individuals who are first-time homebuyers taking out loans for apartment purchases or to existing homeowners taking out loans for living expenses, provided they opt for non-deferred installment repayments and a 5-year variable rate.

Prior to this, Hana Bank ignited the interest rate competition on the 11th by increasing the interest rate for its 3-month maturity time deposit from 2.65% to 2.75% per annum, a rise of 0.1%p.

The interest rate for 6-month maturity deposits was raised by 0.05%p from 2.80% to 2.85%, while the interest rate for 12-month maturity deposits remained unchanged.

KakaoBank, an internet-only bank, also increased the interest rates on its major deposit products, including time deposits and flexible savings accounts, by up to 0.1%p starting from the 16th.

Specifically, the interest rate for 12-month maturity time deposits was raised from 3.10% to 3.20% per annum, and the interest rate for 12-month maturity flexible savings accounts was increased from 3.25% to 3.35% per annum.

It has been reported that several other banks are also considering increasing their deposit interest rates.

A source from a commercial bank commented, "The 'Youth Future Savings' product will be launched in June. As the total balance of savings deposits held by banks is decreasing, there is a possibility that the interest rate competition will further expand."

The "Youth Future Savings" product is known to offer significant advantages over existing bank products, with a fixed interest rate of 5% for 3 years, plus an additional 2-3%p in preferential rates from individual institutions, reaching a maximum of 7-8%.