Deposits at South Korean banks increased sharply this year as there are few viable investment destinations for investors to park their money amid persistent economic uncertainties, industry data showed Tuesday.
According to the data, outstanding deposits at local banks stood at 1,179 trillion won ($1.11 trillion) as of end-November, up 43.2 trillion won from the end of last year.
The end-November figure already surpassed last year’s rise of 37 trillion won in total, the data showed.
The data also showed that bank customers are operating funds on a short-term basis amid economic uncertainty and dearth of available investment vehicles that promise higher return, and that they are scurrying to deposit their money amid economic uncertainties even although local banks offer low interest rates on deposits in tandem with low market rates.
Time deposits at banks fell 4.5 trillion won over the cited period, while demand deposits soared 19.6 trillion won, according to the data.
Usually, a long streak of low rates lead to a fall in bank deposits as bank customers withdraw their money to invest in other vehicles to seek after high return. (Yonhap News)
