Recent increases in the Bank of Korea's key interest rate have led major securities firms to raise the yields on Comprehensive Money Management Accounts (CMA). As a result, the 'overnight value' of idle funds has also increased significantly. Based on the yields of major CMA products, over 100 trillion won in CMA funds are now accruing daily interest of around 7 to 8 billion won.
According to the Korea Financial Investment Association, as of September 10, the CMA balance was recorded at 106.2646 trillion won, an increase of 7.815 trillion won from the previous day's 105.4831 trillion won. CMA accounts automatically invest customer deposits in repurchase agreements (RPs), issued notes, and money market labs (MMWs), providing returns. They are considered a primary channel for idle funds awaiting investment in the stock market.
Following the recent interest rate hikes, CMA yields have been on the rise. Korea Investment & Securities raised the yield on its personal RP-type CMA from 2.30% to 2.50% on August 31. Woori Investment & Securities also increased rates on its CMA Note and Woori WON CMA Note from September 10. For personal customers, the Woori WON CMA Note offers a 3.00% annual rate for amounts up to 10 million won, and 2.80% for amounts exceeding that.
If we assume a yield of 2.50% applies to the 106.2646 trillion won, the daily interest would be approximately 7.28 billion won. At a 2.80% yield, it would rise to about 8.15 billion won, and at 2.85%, it would increase to around 8.3 billion won. However, since CMA accounts can vary in management style and yield based on type—such as RP, MMW, or issued notes—these figures are simple estimates rather than actual total interest payouts.
What does this mean for individual investors? If 100 million won is placed in a CMA yielding 2.50%, the pre-tax daily earnings would be about 6,849 won. At a 2.85% yield, it would be around 7,808 won, and at 3.00%, approximately 8,219 won. While these amounts may seem modest on a daily basis, over a year, investing 100 million won at 2.50% would yield a pre-tax total of 2.5 million won, compared to 3 million won at 3.00%, resulting in a 500,000 won difference.
The rise in CMA yields can be attributed to two recent increases in the key interest rate. The Bank of Korea raised the rate from 2.50% to 2.75% in July, followed by another increase to 3.00% last month. Consequently, major securities firms have raised CMA yields by approximately 0.15 to 0.25 percentage points.
A securities industry official noted, "Even within the same securities account, the yield can differ depending on whether funds are held as regular deposits or managed through a CMA. It's important to consider that different CMA products have varying management styles and risk structures, so investors should review the product details and applicable conditions carefully."
* This article has been translated by AI.
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