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Investors park more money in safe places amid uncertainty

July 8, 2016 - 11:43 By 임정요

Investors in South Korea are increasingly parking their money in safe places and managing them on a short-term basis amid increased uncertainties, data showed on Friday.

The outstanding value of short-term financial products such as demand deposits and time deposits with a maturity of less than six months amounted to 876.2 trillion won ($757 billion) as of end-May, up 3.3 percent from 848.6 trillion won at end-December, according to the data compiled by the Bank of Korea. 


Such short-term deposits accounted for 43 percent of total deposits worth 2,027.5 trillion won at local lenders, the data said.

Money that flowed into bond funds came to 281.4 trillion won in end-May, and when the safe but less profitable money deposits are taken into consideration, the total value of short-term deposits and money parked at bond funds and other safe vehicles reached 1,157.6 trillion won at end-May, the BOK said.

"As local financial institutions offer record-low rates of less than 2 percent for periodical and time deposits, customers temporarily put their money into short-term products such as demand deposits or periodical deposits with a maturity of fewer than 6 months," an official from the Bank of Korea said.

Demand deposits can be withdrawn by an account holder at any time. A time deposit cannot be withdrawn for a specific period of time and a periodic deposit is the investment made in the form of equal deposits over a fixed period regularly. (Yonhap)