Korea Business News Agency - NSP NEWS AGENCY.

(Seoul=NSP News Agency) eunyoung Huh Journalist = Korea’s internet-only banks - KakaoBank and Kbank - have recently launched receiving products with an annual yield of 10 %.

Such high yield deposit products could attract more customers to the banks in a short time, but they can’t actually get the customers financial benefits because they were originally designed for marketing, said many experts in financial industry.

KakaoBank offered a 10% yield to what is called ‘piggy bank service’ where users can save change. However, it is allowing users to collect only small changes like coins and limiting the amount to 100,000 won, making it harder for users to collect 100,000 won to receive 10,000 won of interest.

KakaoBank is promoting its “26-week installment savings’ to offer a 7% yield, but the basic interest rate is only 3.5%, except the preferential interest rates. Furthermore, as the money is installed on a weekly basis over the 26-week period, the actual interest applied stands at 1.73 % at best. In other words, starting with initial subscription amount of 10,000 won, the users can receive only 20,000 won for saving 3,510,000 won incrementally grown for 26 weeks.

Kbank is also advertising its ’Hot Deal Savings x Woori Card’ product that it offers 10% yield annually, but the basic interest rate is only 1.8%, ruling out the complicated preferential interest rate.

“This can lure customers in a very short time, but such tricks may result in a great disappointment to customers as it actually doesn’t give as much interest as they promote,” said officials in finance.

NSP News Agency eunyoung Huh Journalist eunyoung114@nspna.com
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