Busan’s City Treasury Deposit Rate Lags at 2.46%, Near Bottom Among Major South Korean Cities

Busan, South Korea’s second-largest city, is posting one of the lower treasury deposit rates among the nation’s metropolitan governments, newly released data show.

The Ministry of the Interior and Safety, publishing a nationwide comparison for the first time, disclosed figures that allow side-by-side analysis of local governments’ treasury interest rates.

According to the “local government treasury rate integrated status” posted Tuesday on the Local Finance Integrated Disclosure System (Local Finance 365), Busan City Hall’s contracted rate for long-term deposits of 12 months or more stood at 2.46% as of the 13th.

That is below the average of 2.61% for South Korea’s 17 metropolitan-level governments, placing Busan in the mid-to-lower tier at about ninth to 10th.

The release marks the first time the ministry has consolidated treasury rates that local governments previously disclosed individually.

The gap with other major governments was clear in the data. Incheon secured 4.57%, the only metropolitan government in the 4% range and the highest nationwide. Seoul posted 3.45%, about 1 percentage point higher than Busan, and neighboring South Gyeongsang province recorded 2.60%, also above Busan. North Gyeongsang province was lowest at 2.15%.

At the basic local government level, Busan also trailed. While Incheon’s Seo District recorded the highest rate nationwide at 4.82%, the average long-term deposit rate across Busan’s 16 districts and counties was about 2.55%.

Within Busan, Gangseo District was the only one above 3%, at 3.00%. Most others remained in the 2% range, including Yeongdo District at 2.36% and Busanjin District at 2.51%.

Treasury rates are a key fiscal indicator because they directly affect local governments’ interest income. With metropolitan governments managing funds ranging from hundreds of billions to trillions of won, even a 0.5 percentage-point difference can translate into tens of billions of won in annual interest income.

The figures have fueled criticism that Busan failed to secure better terms, unlike Incheon, which drew intense bidding competition among commercial banks to obtain a higher rate. Busan has long faced criticism that, in selecting its treasury banks, it prioritizes stability and customary consideration for local financial institutions over rate competitiveness.

Fiscal experts said the integrated disclosure should strengthen transparency by enabling comparisons across local governments. They said it will be difficult to break a pattern of low rates unless evaluation criteria place greater weight on contracted treasury rates and on measurable contributions to interest income.

Busan’s 2026 budget totals 17.933 trillion won. BNK Busan Bank manages about 70% of the city’s funds, including the general account, as the primary treasury bank, while KB Kookmin Bank manages the remaining 30%, including special accounts, as the secondary treasury bank.

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