Signs of rising bank deposit rates amid the possibility of an additional rate hike in August

As the Bank of Korea raised the base rate by 0.25 percentage points, deposit rates at banks are also showing a renewed upward trend. Woori Bank immediately raised the rates on savings products such as time deposits on the 16th, and the market is also raising the possibility of additional rate increases. The balance of time deposits at the five major commercial banks stood at 949.3998 trillion won at the end of last month, up from a month earlier. This is interpreted as the result of a renewed preference for deposits amid increased stock market volatility, as well as banks gradually raising deposit rates in anticipation of possible rate hikes. At present, the highest interest rate for major oneyear deposit products in the banking sector is around 3.85% per year, while savings banks are already offering an average oneyear time deposit rate of 3.93%. In the market, there are predictions that if the Bank of Korea maintains its additional ratehike stance, deposit products in the 4% range could appear at banks as well. There are differing forecasts for the timing of additional base rate hikes, including as early as August or October. The Bank of Korea says it will judge the pace and timing of hikes while considering inflation, economic conditions, and financial stability together.