Only 10,000 Won for 100 million Deposit. Japan’s Major Banks to Lower Interest Next Month

`You get only 10,000 Won for yearly interest if you deposit 100 million won in a bank` Japan’s major banks, applying nearly zero rates, will lower their interest rates again. Four major banking groups, including Mitsubishi Tokyo Financial Group Inc., Mizuho Financial Group, UFJ, Sumitomo Mitsui Banking Corp., etc., are planning to lower interest rates on their ordinary deposits from the present 0.02 percent down to under 0.01 percent, according to Nikkei Keizai Shimbun on Mar. 25th.

Even if you have 10 million Yen (approx. 100 million Won) on deposit for a year, the interest will be below 1,000 Yen (approx. 10,000 Won). The commission for using cash machine is up to 100∼200 Yen (approx. 1000∼2000 Won) after business hours in Japan. The interest will be almost equal to 5 or 6 times’ use of the machine for a year.

The reason for the lowering is that the major banks to prevent fixed deposit accounts from turning into ordinary accounts upon the scheduled end to full government protection of deposits on March 31. The ordinary account is unstable with the short term and the insurance fee for protection of deposit is higher, which are against interests of banks.

Young-Ee Lee yes202@donga.com