The growth rate of South Korea’s household savings fell to its lowest level since the global financial crisis, reflecting people’s struggle to seek more profitable investment alternatives amid low interest rates, according to data released by the central bank on Sunday.

Household deposits totaled 547.7 trillion won ($494 billion) as of the end of April, up 26.6 trillion won or 5.1 percent from the same period a year ago, the Bank of Korea said.

Of that, savings deposits stood at 492.5 trillion won, growing 3.8 percent during the same period, marking the slowest growth since September 2008, when the corresponding figure plunged to 1 percent amid the advent of the global financial crisis.

Demand deposits, on the other hand, increased to 55.7 trillion won in April, up 8.5 trillion won or 18.1 percent from the previous year.

Demand deposits, which allow the user to deposit or withdraw their money without restraint, tend to rise when bank users seek alternative investment vehicles.

“Low interest rates have driven people to seek other investment opportunities beyond bank savings,” said Lee Seung-hoon, researcher at KB Financial Group.

A large part of the household income thus flocked from banks and into the stock market.

Customer deposits for stock investments amounted to 21 trillion won as of the end of April, up 6.2 trillion won or 42.3 percent on-year, according to separate data by the BOK.

In addition, equity-linked securities and equity-linked bonds are steadily increasing in amount, as they tend to offer a higher level of return than bank account interests.

Earlier this month, the BOK cut its key rate to a record-low 1.5 percent, a decision propelled by concerns that the outbreak of Middle East respiratory syndrome in Korea may further drag down the domestic economy.

The average interest rate for savings accounts stood at 1.78 percent as of the end of last month, but the figure is expected to fall further, reflecting the recent key rate cut.

By Bae Hyun-jung (tellme@heraldcorp.com)