Major Commercial Banks Raise Deposit Rates to 3.5%: Where Should Savers Put Their Money?
Major commercial banks have raised 1-year fixed deposit rates to 3.5% per annum, sparking fierce deposit competition amid rising market yields.
On September 21, 2026, major South Korean commercial banks raised their 1-year fixed deposit rates back to the 3.5% level, intensifying competition to attract retail deposits. The move comes as rising market interest rates and end-of-quarter liquidity requirements accelerate a shift toward safe-haven savings assets.
Drivers of Deposit Rate Hikes and Capital Flows
Following rate hikes by KB Kookmin Bank and Woori Bank to 3.5% per annum for 1-year terms, NH NongHyup Bank (3.45%), Shinhan Bank (3.4%), and Hana Bank (3.3%) have followed suit. Certain promotional products with relationship bonuses now offer peak yields of up to 3.8%.
Key catalysts include recent spikes in treasury and bank debenture yields, alongside pressure on banks to fulfill Liquidity Coverage Ratio (LCR) requirements ahead of the quarter-end. Amid financial market volatility, retail savings in the top five commercial banks have surged by over 70 trillion won in recent months.
Frequently Asked Questions (FAQ)
Q1. Is now a good time to lock in a 1-year deposit?
Since recent rises in bond yields have been swiftly passed on to retail deposits, locking in fixed yields around 3.5% is compelling for conservative savers. Split-maturity strategies between 6-month and 1-year deposits can offer flexibility if rates climb further.
Q2. What should depositors check before choosing high-yield products?
Rates exceeding 3.6% often carry qualifying conditions such as direct deposit payroll transfers or minimum credit card spending. Depositors should verify base yields versus conditional bonuses before subscribing.