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Biz News Korea(Eng)
Demand deposits in Korean banks in high demand amid uncertainties in financial market
- Collected
- 2017.02.20
- Distributed
- 2017.02.21
- Source
- Go Direct
A demand deposit including money market deposit account (MMDA) refers to a type of account from which depositors can withdraw their funds at any time without any conditions. According to the financial industry on Sunday, the nation’s five major banks - Shinhan, KB Kookmin, KEB Hana, Woori and Nonghyup - saw their funds held in demand deposit accounts increase 9.6 percent on year to 409.92 trillion won ($356 billion) as of end of December 2016. The gain of 36.17 trillion won nearly doubled the 19.8 trillion won growth in fixed deposit accounts.
The amount of funds placed under demand deposits in the country’s commercial banks has been on a steady rise from 275.62 trillion won in 2013 to exceed 300 trillion won in 2014 and 400 trillion won last year. An official from a commercial bank said the funds would continue to rise for the time being as the wealthy prefer to place their lump-sum money in safe yet immediately callable bank account amid foggy prospects about the economy and uncertainty in the financial market.
Amid increasing demand, banks including Standard Chartered Bank Korea, Nonghyup and KEB Hana have launched demand accounts providing annual yield in the range of 2 percent, higher than the general savings yield of 1 percent range.
They are also customizing demand deposit accounts by connecting them with credit card service or primary account. Banks have turned to commission revenue due to low-interest environment.
By Park Yoon-ye
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]