Banks get creative with deposit products as market volatility sends stock investors back to savings

Korean banks are rolling out a wave of themed deposit products as they compete to lure retail money back from the stock market amid heightened volatility, while also shoring up funding ahead of further interest rate hikes, according to industry officials, Tuesday. The benchmark KOSPI has swung wildly in recent sessions. After tumbling 17.2 percent over three trading days from July 28-30, the index posted a record one-day rebound of 17.9 percent on Friday. It has since traded in the 6,100 to 6,200 range. The market’s sharp swings have prompted many retail investors to move money from equities back into safer assets. As of July 29, outstanding time deposits at the country’s five largest lenders — KB Kookmin, Shinhan, Hana, Woori and NH NongHyup — stood at 973.5 trillion won ($680.8 billion), up by more than 24 trillion won from a month earlier. For banks, the influx comes at an opportune time. Encouraging customers to lock away cash now allows lenders to secure a stable source of funding before any additional rate hikes from the Bank of Korea make raising deposits more expensive. W