Related
The Industrial Bank of Korea said yesterday that it is offering a time deposit that provides 5.7 percent annual interest for a one-year maturity when opened online, compared with 5.4 percent for similar products sold in the bank.
The annualized 5.7 percent rate is 0.1 percentage point lower than the lender's special time deposit, which is only available at certain times to limited numbers of subscribers. But these special products are rare amid Korea's frozen benchmark interest rate. Most savings rates are sliding.
According to Kookmin Bank, interest rates on special time deposits, which hovered around 6 to 7 percent at the beginning of the year, have retreated to the upper 5 percent range.
The state-run Industrial Bank of Korea grants higher rates on installment savings accounts opened over the Web. While a one-year maturity installment savings plan has an annualized interest rate of a little over 4 percent, the same product sold online offers 5.2 percent.
Hana Bank is selling time deposits over the Internet that will provide an annualized 5.7 percent rate, on the condition that the combined deposit volume from all subscribers surpasses 10 billion won by tomorrow. Lenders say that the Internet saves time and labor costs. In return, they provide higher interest rates or don't charge transaction fees.
This is why Industrial Bank of Korea and Hana Bank, which have relatively fewer branches than other lenders, have been stepping up efforts to promote deposits and installment savings products sold over the Internet.
"Banks' profitability has been slumping," said Jin Han-seop, head of the private finance team at the Industrial Bank of Korea. "Rivalry among lenders over Internet deposits is expected to intensify as banks scramble to sell more such products rather than special time deposits that do not turn much profit."
This article appeared on www.joongangdaily.joins.com
June 18, 2008
| 0 Comment(s) |
sponsors
