As the KOSPI index lost over 2,000 trillion won in market capitalization from last month's peak, signs of a 'reverse money move' are emerging as funds that had flowed into the stock market are returning to bank deposits. While investor deposits have rapidly decreased, more than 21 trillion won has been directed into fixed-term deposits in just one month.
According to the financial sector on July 29, the balance of fixed-term deposits at the five major banks—KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup—was recorded at 971.883 trillion won as of July 24. This marks an increase of 21.6885 trillion won from the end of last month, the largest rise this year.
In contrast, investor deposits surged to a record high of 139.6948 trillion won on July 4 but fell to 104.2975 trillion won by July 23, a decrease of over 35 trillion won in less than two months.
As the stock market continues to adjust, investors seeking to avoid risk are turning to fixed-term deposits, which offer stable interest income. The Bank of Korea's recent interest rate hike has also contributed to increased demand for deposits.
KB Kookmin, Woori, and Hana banks have raised their major deposit and savings rates to a maximum of 3.20% per year. Shinhan Bank's 'Shinhan My Plus Fixed Deposit' offers up to 3.30%, while NH Nonghyup Bank's main fixed deposits provide up to 3.25%.
However, the decrease in market capitalization does not directly translate to a corresponding increase in bank deposits. The decline in market value reflects a reduction in stock prices, and the increase in fixed-term deposits may also include internal fund movements such as demand deposits.
Nonetheless, the significant rise in fixed-term deposits alongside the drop in investor deposits indicates a growing risk-averse sentiment due to stock market instability.
A financial sector official stated, "Given the likelihood of continued stock market volatility and expectations of further interest rate hikes, competition among banks to attract deposits may intensify again."
* This article has been translated by AI.
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