Recently, interest rates on U.S. dollar deposit products have risen. The interest rates on U.S. dollar deposit products of many banks can reach up to around 5%. Among them, the interest rate of Jiangsu Bank’s U.S. dollar deposit products is as high as 5.5%.
Experts remind that considering the cost of currency exchange, individuals should be cautious in exchanging currency to purchase such products if they are only for investment and financial management purposes.
Many interest rates exceed 5%
Recently, the interest rates of U.S. dollar deposit products have experienced a remarkable trend. At present, the interest rate on one-year U.S. dollar deposit products of many banks is as high as 5.5%, but in 2022, the interest rate of some banks will still be between 3% and 4%.
The financial management manager of a branch of ICBC in Beijing said that the interest rate on deposits with a one-year term and a minimum deposit of US$100,000 can reach 5%. In addition, the Agricultural Bank of China’s 1-year, minimum deposit interest rate of US$10,000, and Minsheng Bank’s 1-year US dollar deposit product interest rate are both around 4.8%.
Some city commercial banks offer U.S. dollar deposit products with interest rates above 5%. For example, the “Xiangyingbao” U.S. dollar deposit product issued by Jiangsu Bank Shanghai Branch from February 1 to March 10 has a 1-year term and a minimum deposit interest rate of US$10,000, with an interest rate of up to 5.50%. The interest rate is 5.30%. Bank of Hangzhou can also reach 5.3% for 13 months and above US$100,000.
Compared with the interest rates on RMB time deposits, the interest rates on U.S. dollar deposit products of most banks are much higher. For example, the one-year U.S. dollar deposit product launched by China Merchants Bank has an interest rate between 4.3% and 4.7%. According to a financial manager, the interest rate of China Merchants Bank’s two-year time deposit is 2.65% and the three-year interest rate is 2.9%.
Be cautious when purchasing foreign currency
In terms of interest rates, US dollar deposit product interest rates are more attractive, and discussions on exchange deposits are gradually heating up. “The main reason is that the interest rates on U.S. dollar deposit products have been high recently. I am debating whether to exchange RMB for U.S. dollars to buy them.” Ms. Zhou, who had just withdrawn money from the fund at the door of a branch of Jiangsu Bank in Beijing, said that compared with large For certificates of deposit and ordinary time deposits, the interest rate is very attractive.
However, many experts and bank financial managers said that “exchanging foreign currency and depositing US dollars” has multiple risks and needs to be treated with caution. The recent rise in U.S. dollar deposit product interest rates is closely related to the Federal Reserve’s continued interest rate hikes, but there is uncertainty in the follow-up.
Dong Ximiao, a researcher at China Merchants Union Financial Group, said that since the end of last year, the Fed has shown signs of slowing down its interest rate hikes. In December last year, the rate hike was 50 basis points. In January this year, the rate hike slowed down to 25 basis points. The next step is still Slowdown possible. In this case, considering the cost of currency exchange, residents should be cautious about currency exchange for the purpose of investment and financial management.
Postal Savings Bank researcher Lou Feipeng predicts that the RMB exchange rate against the US dollar will still show two-way fluctuations. In the short term, the strong US dollar index will put pressure on the RMB exchange rate. Factors such as the Federal Reserve stopping raising interest rates in the middle and second half of the year and domestic economic growth improving will have a negative impact on the RMB exchange rate. form support. For individuals, in addition to interest rates, whether to participate in U.S. dollar deposits must also consider exchange rate changes.