By Kim Jae-won
Some people prefer secure financial products such as term deposits during times of economic crisis, while others enjoy taking risks for higher returns amid lower interest rates and a frozen real estate market.
To satisfy the preferences of either customer, KB Kookmin Bank has released an equity market-linked deposit account which offers extra returns based on stock market performance. The product is designed for those seeking both stability and profitability at the same time.
Deposit with KB Fund aims to attract customers who are ready to sign up for term deposits but seek higher returns than the interest rates offered. As the biggest lender in the nation, KB Kookmin has reflected on varying customers’ needs by combining the two aspects.
Individuals or self-employed clients can open the account, which requires a deposit of at least 3 million won. Contract terms range between six and 36 months. The lender offers 3.9, 4.0 and 4.1 percent in annual interest rates to 12-, 24- and 36-month contracts, respectively.
There are five options depending on customers’ purpose of asset management and investment style. Customers who want to manage it conservatively can choose the interest-only option, which invests the interest from the deposit in securities.
Others who don’t mind taking a risk may select 10, 30, 50 or 100 percent choices, each investing a portion of the principle in stocks. For instance, a customer who chooses the 10 percent option can receive 90 percent of the principle and interest at the end of the contract, while the remaining 10 percent will be invested in the fund.
“More and more customers ask for additional profits though many still prefer stable assets,” the bank said in a statement. "We hope Deposit with KB Fund can contribute to increasing customers’ assets.”
The bank says that people need to be aware that money invested in funds is not protected by the Korea Deposit Insurance Corp. Profits and losses will be subject to investors, it added.