Financial losses and interest rate cuts on deposits have led many to turn their attention to the "structured deposits" that promise both principal protection and safety. But are structured deposits, once the darling of investors, still the ideal investment product? Can they shoulder the "heavy burden" of the recent lackluster financial market? Let's analyze together.
Structured deposits are a very unique product, positioned between deposits and financial products. When they were first introduced, they offered the safety of deposits while also achieving the high returns of financial products, which made them popular.
After so many years of development, with the financial market currently suffering from significant losses and large-amount certificates of deposit also experiencing interest rate cuts, and with deposit interest rates continuously declining, what is the state of structured deposits today?
Recently, we reviewed the structured deposits being offered by various banks. It was an eye-opener to discover that the current structured deposits have lost their luster for several reasons:
Firstly, the returns have significantly decreased. With the persistent downturn in the investment market, structured deposits have not been spared. For instance, a large state-owned bank's structured deposit with a 358-day term has a return range of only 1.1% to 1.5%. This means that the highest return upon maturity of this product would be 1.5%. It's important to note that the one-year fixed deposit rate offered by banks can reach around 2.0%, which is significantly higher than that of structured deposits. It's clear that the advantage of structured deposits has been largely eroded.
Secondly, the available amounts are limited. Upon reviewing other banks' products, there are also high-yielding options. However, when you attempt to purchase them, you may find that either the quota is too small to secure a purchase, or there are certain purchase restrictions, such as regional limitations, age restrictions, customer group restrictions, and so on. In any case, enjoying high returns is not that easy.That being said, structured deposits, as a product that has been issued for many years, are not without merit; their advantages are quite evident.
First and foremost, the most significant advantage is the principal protection. This means that regardless of how the return trend fluctuates, the principal will not be lost upon maturity. Additionally, the principal portion is protected by the central bank's deposit insurance system up to 500,000 yuan. Compared to the recent financial products that often suffer principal losses, this is quite reassuring.
Secondly, regarding the return portion, structured deposits have a characteristic of having a certain range of fluctuation in their returns. This implies that the final investment return on this product is uncertain; it could be quite high, but it might also be very low, or even fail to outperform a regular fixed deposit. It is crucial for everyone to be mentally prepared for this before making a purchase.
Lastly, it provides a reliable option for those who enjoy investing. How should we understand this point? Let's analyze the characteristics of this product. Most of the funds in structured deposits are invested in regular deposits, with only a small portion embedded in financial derivatives. The types of these derivatives are quite diverse, such as gold, foreign exchange, futures, and so on.
At this juncture, our room for maneuver emerges. For instance, if you believe that the price of gold will rise in the near future but are uncertain and fear making an investment mistake that could lead to a loss of capital, then a structured deposit linked to gold is undoubtedly the best choice. This way, you can ensure the safety of your principal while also enjoying the returns from investment, which is a fairly perfect investment portfolio strategy.
In any case, as a financial investment product, structured deposits have very distinct features and provide our broad investor base with an additional option. As for the final choice, everyone should weigh the pros and cons, consider their own actual circumstances, and make a decision after comprehensive analysis and judgment.
So, what do you think about structured deposits? Would you be willing to purchase such a product?
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