I heard that the interest rates on deposits are going to be reduced again recently. Is that true?
Yes, and this time it's a collective interest rate cut by all banks, especially the large-denomination certificates of deposit that many people really like, which have seen a decline to varying degrees. This interest rate cut is happening without any changes in the deposit interest rates announced by the central bank, and all banks are very tacitly taking a "unified action." The story behind this is worth looking into. Today, let's analyze together, what is the real reason for this interest rate cut?
I remember saying a few days ago that after the central bank announced the reserve requirement ratio cut, it provided the necessary conditions for banks to cut interest rates. On April 25th, just after the implementation of the reserve requirement ratio cut policy, banks rushed to announce the news of interest rate cuts. Many banks reduced their large-denomination certificate of deposit interest rates by 0.1 percentage points, and some joint-stock banks even directly cut by 0.75 percentage points, showing the urgency of the banks to cut interest rates.
So, what is the real reason for this interest rate cut?
First of all, of course, as we just mentioned, after the central bank cut the reserve requirement ratio, it released a large amount of funds to banks. Banks with money in hand, of course, will be less dependent on deposits.
Secondly, the just-passed first quarter is a very important "good start" period for banks, so to attract a large amount of deposits, the interest rates must be much higher than usual. Now that the first quarter has passed, whether the task targets are completed or not, they have become the past, so the current demand for deposits by banks is not so strong.
Another key point is that due to the impact of the epidemic and other factors, many industries have been affected to varying degrees. As a result, many friends' demand for loans has greatly decreased. In the case where loans cannot be issued, if banks have too much money in hand, they have to keep paying interest. Banks, of course, will not do this, so it is natural to reduce the deposit interest rate to reduce costs.
The last point is that interest rate cuts have become a major trend at present. It's not just about deposits, but also about continuous interest rate cuts on loans. Especially at the request of the state, banks need to provide necessary financial support for the development of the real economy, small and micro enterprises, advanced manufacturing, rural revitalization and other fields. A large part of this is reducing fees and making profits. So, while the loan interest rates are falling, in order to ensure the basic interest spread, it is inevitable for the deposit interest rates to go down.From the analysis above, it is not difficult to see that with the passage of time and the continuous accumulation of various factors, the continuous decline of the deposit market has become an inevitable trend. The market situation of low interest rates has gradually become a fact.
So, will the interest rates on deposits made previously be reduced? How can we obtain high-yield products in the future?
For time deposits that have been made, the interest rate will not change before they mature. Therefore, as I have said many times before, I suggest that everyone, if the fund planning allows, should try to store long-term time deposits during the period of interest rate decline. This way, you can lock in high returns in advance, and no matter how interest rates change in the future, there is no need to worry at all.
However, if you have not yet secured high-interest time deposits but still have this need, we can do the following:
Firstly, it is essential to closely monitor the latest news from the central bank and nearby banks, as the market changes are too rapid. Only by continuously paying attention to relevant information can we possibly obtain the latest news, which will definitely be beneficial for our future investment and financial management, as well as decision-making.
Secondly, it is crucial to communicate and maintain contact with bank wealth managers. This is because each bank operates differently, with varying capital usage and credit structures, resulting in different levels of demand for high-interest deposits, which can also change at any time. In such cases, what we need to do is to communicate in advance with the wealth manager you are familiar with and inform them of your needs.
If the bank plans to issue some high-yield products in the future, the wealth manager will definitely be informed in advance and will notify you at the earliest opportunity. Then, we can promptly purchase the required products.
Thirdly, accumulate small amounts into a larger sum. Try to gather as many of our scattered funds together as possible because many high-yield products issued by banks have a purchase threshold. Generally speaking, the higher the threshold, the greater the return compared to ordinary deposits, such as the well-known large-amount certificates of deposit and many exclusive deposits for private banking.Therefore, if we have a substantial amount of funds, we can pool the money together and choose products with higher entry thresholds, thus enjoying the benefits of high-yield products.
Secondly, we can attempt to select other different products. In fact, in the investment market, there are many excellent products besides term deposits, such as government bonds, pension financial products, bond funds, and money market funds, all of which are quite good. Everyone can certainly give them a try.
In summary, as the market continues to change, the interest rates on bank deposit products are also gradually decreasing, and this trend is not expected to change for a long time in the future. At this time, it is necessary for us to correctly view the downward trend of interest rates, pay more attention to the latest interest rate policy changes, and strengthen our learning to understand more about the related products available on the market. Perhaps you will find a high-quality product that suits you.
So, what are your thoughts on the current trend of declining bank deposit interest rates?
We welcome everyone to leave comments and discuss together.
