April 27, 2024
Finance
Koreans cancel installment savings amid slump
[THE INVESTOR] A growing number of South Koreans are canceling their installment savings accounts before maturity this year, scared by the country’s sluggish economy, industry data showed on Oct. 31.
The early cancellation rate of installment savings accounts at Shinhan, KB Kookmin, KEB Hana and three other major banks came to 45.2 percent as of end-September, up sharply from 42.6 percent the previous year.
Industry sources said households, when they expect worsening finances, tend to terminate their insurance policies first, then stop putting money into investment funds and finally, cancel installment savings programs.
“Installment savings accounts are the last bastion of protection and people tend to hold them until the last minute,” a bank official said. “The rise in the early cancellation rate can be seen as an indication that households are facing more difficult financial situations.”
(theinvestor@heraldcorp.com)
The early cancellation rate of installment savings accounts at Shinhan, KB Kookmin, KEB Hana and three other major banks came to 45.2 percent as of end-September, up sharply from 42.6 percent the previous year.
Industry sources said households, when they expect worsening finances, tend to terminate their insurance policies first, then stop putting money into investment funds and finally, cancel installment savings programs.
“Installment savings accounts are the last bastion of protection and people tend to hold them until the last minute,” a bank official said. “The rise in the early cancellation rate can be seen as an indication that households are facing more difficult financial situations.”
(theinvestor@heraldcorp.com)
