South Korean banks raise deposit rates amid rising yen demand

South Korean commercial and internet banks are raising interest rates on time deposit products in response to rising market rates. Major institutions, including KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup, have implemented several rate hikes, bringing 1-year fixed deposit rates close to the high 3% range. Internet-only banks such as K-Bank, KakaoBank, and Toss Bank are offering even higher rates, with some reaching approximately 3.7%.

As interest rates rise, the total balance of time deposits at the five major commercial banks has surpassed 1,000 trillion won, reaching 1,060.8 trillion won by the end of September.

Simultaneously, there is a surge in yen-denominated deposits. As the Korean won strengthens against the Japanese yen—reaching an 18-year low of the 840 won per 100 yen range—investors are engaging in ‘yen-tech’ to capitalize on potential future rebounds in the yen's value. The balance of yen deposits at the five major banks increased by approximately 5.6% in a single month, rising to 1.14 trillion yen.