**Number of Large Deposit Accounts Exceeds 100,000 for the First Time, Total Balance Surpasses 800 Trillion Won**
The number of deposit accounts with balances exceeding 1 billion won has surpassed 100,000 for the first time. This phenomenon is analyzed as a result of companies depositing large sums in banks in anticipation of further declines in market interest rates.
According to the Bank of Korea’s economic statistics system, as of the end of last year, there were 100,000 accounts with balances exceeding 1 billion won among the banks’ savings deposits. This is an increase of 3,000 accounts from the 97,000 accounts as of the end of June last year, marking the first time it has exceeded 100,000 since related statistics began in 2002.
The total balance has also significantly increased, exceeding 800 trillion won for the first time. The balance of accounts exceeding 1 billion won stood at 815.81 trillion won as of the end of last year, up by 34.578 trillion won (4.4%) from six months prior (781.232 trillion won). The balance of large deposit accounts had increased to 796.348 trillion won at the end of 2022 but decreased to the early 770 trillion won range in 2023 before rising again from last year.
At the end of last year, fixed-term deposits and savings deposits exceeding 1 billion won held steady at 61,000 and 5,000 accounts, respectively, while corporate demand deposits rose from 31,000 to 34,000 accounts. Corporate demand deposits are products where corporations temporarily deposit surplus funds in banks. It is suggested that in the face of increased internal and external uncertainties, such as Donald Trump’s election as U.S. President and the declaration of martial law, companies have postponed investments and held onto surplus funds.
By type, the balance of fixed-term deposits, which accounts for the largest portion, increased from 538.531 trillion won at the end of June last year to 569.102 trillion won at the end of last year, a rise of 30.571 trillion won (5.6%). The balance of corporate demand deposits increased from 231.556 trillion won to 234.825 trillion won (1.4%), and savings deposit balances increased from 10.529 trillion won to 11.096 trillion won (5.4%).
As of the end of June last year, the base interest rate, which was as high as 3.50% per annum, has fallen to 2.75% now. The Bank of Korea lowered the base interest rate in October and November last year, and considering the decline in market interest rates even before that, there has been an influx of demand for ‘last train’ high-interest deposits. The Bank of Korea is expected to lower rates further within the year to respond to economic slowdown.