Interest earned from savings accounts continues to fall

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Interest earned from savings accounts continues to fall

The interest rate on commercial banks’ saving accounts has fallen once again.

According to the Bank of Korea on Thursday, interest earned on savings accounts marked 1.31 percent, a 0.01 percentage point drop from July. That means a client depositing 1 million won ($909) in a savings account will only earn 13,100 won in interest.

The rate has been falling since the central bank lowered the key interest rate to an all-time low of 1.25 percent in June as a pre-emptive move against possible repercussions from restructuring in the shipping and shipbuilding industries.

Until the end of 2014, the rate was above 2 percent, but by the end of last year, the rate had fallen to 1.72 percent and has continued to fall since June, hitting 1.44 percent in July.

Interest on fresh loans, on the other hand, remained unchanged at 3.23 percent. The rate on mortgages rose 0.04 percentage points from the previous month to 2.7 percent.

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