Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Money leaves banks at faster pace as stock market rallies
An electronic trading board at Hana Bank headquarters in central Seoul shows the benchmark KOSPI closing at 4,723.10 points, up 30.46 points or 0.65 percent from the previous session, Wednesday. The main index closed above 4,700 points for the first time in history, extending a winning streak of nine trading sessions since the start of 2026. Yonhap
By Yi Whan-woo
KOSPI closes above 4,700 points for 1st time in history
For Sung Moon-kyu, a salaried worker in Seoul, keeping money in the bank had long been the most reliable financial safety net as he was not adventurous and had never been tempted by riskier products such as stocks.
But his wealth strategy recently shifted, spurred by a bullish KOSPI, prompting him to withdraw tens of millions of won he had saved over the years and invest them in the stock market.
“The rally is accelerating at an even faster pace over time, convincing me that it’s a matter of how much I can gain, not whether I gain or lose,” he said.
Sung represents many savings-minded investors who are increasingly moving into stocks as the benchmark KOSPI has risen in all nine trading sessions since the start of 2026.
On Wednesday, the main index gained 0.65 percent to close at 4723.10 points, marking the first time it has closed above 4,700 after consecutively breaking 4,300, 4,400, 4,500 and 4,600 over the previous eight sessions.
The step-by-step climb is rarely seen and comes after a 75.62 percent gain in 2025 — the highest among major economies — prompting speculation that the index could reach an unprecedented 5,000 points sooner than expected this year.
Accordingly, data compiled by the five major commercial banks — KB Kookmin, Shinhan, Hana, Woori and NH NongHyup — showed that the combined outstanding balance of their demand deposits has fallen by nearly 4 trillion won ($2.7 billion) per day on average so far this month, declining from 674 trillion to 646.52 trillion won.
Demand deposits are cash held in bank accounts that customers can withdraw on demand or as needed without prior notice. These include checking accounts and non-term savings accounts.
“This trend of decline is unusual,” an official at one of the banks said, noting that the average daily drop in demand deposits at the five major banks was 1.18 trillion won in January 2024 and just 212.6 billion won in January 2025.
“The money is believed to be moving into the booming stock market, with many clients who have never invested in stocks before now participating for the first time,” the official added.
He noted that if the current pace continues, this month could see the largest average daily decline in demand deposits on record unless the money flows back in.
Previously, the steepest drop occurred in April 2024, when daily withdrawals averaged 1.5 trillion won.
“The pace of withdrawals is becoming extreme, in line with the KOSPI’s rapid growth," said Jung Eui-jung, head of the Korean Stockholders' Alliance.
Demand deposits fell by an average of 1.21 trillion won per day even in October 2025, when the KOSPI surpassed the 4,000-point level for the first time, Jung said.