South Korean savings banks have seen their "uninsured" deposits almost double over the past two years as people seek higher returns amid low interest rates, data showed Thursday.

According to the data by the Korea Deposit Insurance Corp., deposits of 50 million won ($41,200) or more per account at local savings banks totaled 5.7 trillion won as of end-September, with people and firms holding such accounts numbering 45,000.

Of the total, deposits exceeding the 50 million-won mark stood at 3.56 trillion won, compared with 1.73 trillion won two years earlier. The KDIC provides protection of up to 50 million won in principal and interest per depositor should a financial institution go belly-up.

Market watchers said with the nation's benchmark interest rate staying ultra-low for years, customers are rushing to put their money in savings banks as they offer higher interest than commercial banks.

According to the Korea Federation of Savings Banks, the interest on one-year time deposits at savings banks averages 2.08 percent, nearly 1 percentage point higher than that offered by commercial banks.

In June, the Bank of Korea, South Korea's central bank, lowered its benchmark interest rate by a quarter percentage point to an all-time low of 1.25 percent in an effort to help revitalize the weak economy.

Cited as another reason is the improving financial health of savings banks, which has helped them regain customer trust they lost after a series of business suspensions five years ago.

According to the KDIC, their average capital adequacy ratio, a key barometer of financial soundness that measures the proportion of a bank's capital to its risk-weighted credit, came to 14.7 percent as of end-September, more than double the 7 percent required by financial authorities. (Yonhap)