The real interest rate on savings deposits at domestic banks has plunged to a 16-month low.

The Bank of Korea says the average annual interest paid on savings at domestic lenders stood at 3.9 percent in January.

Consumer prices, however, rose 3.1 percent during the same month, reaching a four-month high.

After subtracting the rate of inflation from the interest rate on deposits, the real interest rate comes out to 0.8 percent which is the lowest level since September of 2008.