The number of digital savings accounts opened at the nation’s banks rose 12.4 percent quarterly to 6.46 million as of the end of last year, as lenders offered higher interest rates to compete against Web-only banks, Financial Supervisory Commission (FSC) data showed yesterday.
The figure rose 90 percent from 3.38 million at the end of 2019, the data showed.
Among the 35 banks that allow clients to open digital savings accounts, Taishin International Bank (台新銀行) remained in first place with 2.36 million accounts, up 5.3 percent quarter-on-quarter, while Cathay United Bank (國泰世華銀行) retained the number two spot with 966,000, up 15.68 percent quarterly, the data showed.
Photo courtesy of Union Bank of Taiwan
Bank SinoPac (永豐銀行) registered a 14 percent increase to 663,000 from the previous quarter, and O-Bank (王道商業銀行) and First Commercial Bank (第一銀行) finished last year with 450,000 accounts each, the data showed.
The commission said in a report that the rapid rise in the number of digital savings accounts reflects the banks’ efforts to provide their clients with rewards such as higher interest rates.
It also points at the banks’ strategy to counter an imminent challenge from the nation’s three Web-only banks, the report said.
For example, Taishin Bank’s digital service offers an annual interest rate of 1 percent for demand deposits of less than NT$300,000 (US$10,569), much higher than the annual interest rate of 0.04 percent for deposits at its physical branches, awarding digital account clients with NT$2,880 more interest income than those using a physical branch, it said.
Bank SinoPac’s digital service offers interest rates of up to 1.1 percent for demand deposits of less than NT$500,000, while O-Bank offers interest rates of up to 1 percent for demand deposits higher than NT$1 million, the banks have said.
While Cathay United Bank does not provide high interest rates for digital account holders, it allows them to transfer or withdraw money without paying handling fees 50 times and 15 times per month respectively.
Web-only Rakuten International Commercial Bank Co (樂天國際商銀), which began its pilot run in late December last year, registered 55 digital savings accounts as of the end of last year, but the number of clients is expected to grow fast after the bank began formal operations early last month, the commission said.
Line Bank (連線商業銀行) and Next Bank (將來銀行) have yet to gain the commission’s approval to start their Web-only operations.
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