Korea's bank deposits surge in 2015

The amount of money funneled to South Korean banks in deposits and bank debentures soared in 2015 from a year earlier, central bank data showed Sunday, apparently due to a rise in floating money prompted by low interest rates and uncertainties in the investment market.

The total amount of funds held by local banks came to 1,391 trillion won ($1.15 trillion) at the end of 2015, up 106.7 trillion won from a year earlier, according to the data from the Bank of Korea.

The 2015 tally marked the fastest rate of increase since the central bank began compiling such data in 2002, while also marking a 59.3 percent spike from a 67 trillion won increase in 2014.

The BOK has kept its key rate frozen at a record low 1.5 percent since June in an attempt to help bolster growth in Asia's fourth-largest economy.

Low interest rates would normally encourage investors to seek other investment opportunities with higher yields than banks, but they were apparently spooked by growing uncertainties in the local and global markets.

According to the data, the increase in funds held by local banks came mostly from a rise in short-term deposits, which jumped 84.5 trillion won from a year earlier compared with the 67.9 trillion won increase in 2014.

The amount of fixed or time deposits, on the other hand, dropped 8.2 trillion won from a year earlier in 2015, marking a turnaround from a 13.2 trillion won gain in the previous year, it showed. (Yonhap)