As the stock market correction prolongs, funds that once flowed into the stock market are returning to bank deposits, a phenomenon known as "reverse money movement."
Not only individuals but also corporations are putting their surplus funds into time deposits, pushing the total time deposit balance of the five major banks past 991 trillion won.
As of August 6, the combined time deposit balance of the five major commercial banks—KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup—stood at 991.4441 trillion won.
This figure combines time deposits from individuals, small and medium-sized enterprises, and large corporations.
The time deposit balance, which stood at 939 trillion won at the end of last year, increased to 946 trillion won in February of this year before declining to the 937 trillion won range in March and April.
At that time, expectations grew that the stock market, which had plummeted due to armed conflict in the Middle East, would recover, prompting money to move from bank deposits to the stock market, centered around retail funds.
However, the recent trend has shifted once again.
The time deposit balance, which was 949.4 trillion won at the end of June, surged by approximately 35.5 trillion won in just one month to reach 984.9 trillion won by the end of July.
The upward trend has continued into this month, surpassing 991 trillion won on August 6.
This is analyzed to be the result of heightened stock market volatility coupled with signals of a tightening stance from the Bank of Korea and the U.S. Federal Reserve.
After hitting a record high of 9,331 on June 19, the KOSPI declined, slipping to 5,663 by July 29.
Diverted funds waiting for investment opportunities in the stock market have also decreased.
As of August 6, investor deposits hovered around 104 trillion won, dropping by more than 25% in two months compared to 139.7 trillion won in early June.
It is not just individual funds returning to banks.
Corporate time deposit balances surged by more than 50 trillion won in just over two months, rising from 509.6 trillion won at the end of May to 561.4 trillion won on August 6.
This is interpreted as companies actively placing their surplus funds into low-risk time deposits amid rising market interest rates.
Deposit rates have also risen.
Currently, the top annual interest rate for 1-year time deposits at the five major banks ranges between 3.2% and 3.3%, higher than the late 2% range seen just before the Bank of Korea's base rate hike last month.
In effect, investors fatigued by stock market volatility and corporate funds have shifted back from the stock market to banks, and attention is focused on whether this counter-trend will continue.
Reported by Kim Minjeong | Video by Kim Na-on | Graphics by Lee Jung-joo | Produced by SBS Digital News
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