Today is October 11, 2023. Dear friends, when you retire, you may feel that you have completed your career and enjoyed the fruits of your hard work.
You have a pension of $7,000 a month, and $800,000 in savings to cover daily expenses and contingencies.
You might think that you don't need to manage your money anymore, just keep your money in the bank.
However, have you ever thought that with the impact of inflation, prices will continue to rise, while the interest rate of the bank will be low, which means that your money will be less and less valuable.
Have you ever wondered if your savings could withstand sudden medical bills or other large expenses?
Have you ever wondered if you can earn enough to provide yourself or your family with a better quality of life, or to fulfill some dreams and wishes?
So, even if you're already retired, don't give up on your finances.
Wealth management can help you preserve and grow your wealth, making your money work for you, not for your money².
Financial management can help you plan your future, giving you more choices and freedom.
Wealth management can help you achieve happiness and security for yourself and your family.
Of course, this doesn't mean you have to invest or spend all your money.
Financial management also needs to have a balance between steadiness and progress, balance between savings and expenditure, and balance between risk and return.
Financial management also needs to have a goal and plan, according to their actual situation and needs, choose the appropriate financial management methods and products.
In this article, I will take the Agricultural Bank of China as an example, introduce some common deposit methods and interest rates, and give some calculation formulas and examples.
Hope this information can be helpful to you.
1. Demand deposits of the Agricultural Bank
Demand deposit is the simplest and most flexible deposit method.
It has no fixed deposit period and early withdrawal limit, and it can be withdrawn as you go.
However, it also has a disadvantage, which is that interest rates are very low.
According to the latest interest rate table published by the Agricultural Bank of China, the annual interest rate for demand deposits is 0.20%.
This means that if you deposit $100,000 into an agricultural bank current account and don't use it for a year (let's say 365 days), the interest you can receive by October 11, 2023 is:
Interest = deposit amount× annual interest rate × number of deposit days/365
Interest = 100,000× 0.002×365/365
Interest = $200
That is, your $100,000 deposit only increased by $200 after a year, which equates to an increase of $16.67 per month.
Such gains are obviously very low, not even enough to offset inflationary losses.
So, if you want to grow your money, demand deposits are not a good option.
2. Agricultural Bank of China time deposits
Time deposit refers to a deposit method in which a sum of money is deposited in a bank according to a certain deposit period and interest rate, and when it matures, the principal and interest are withdrawn.
The advantage of time deposits is that the interest rate is higher than demand deposits and they have a fixed income guarantee.
The disadvantage of time deposits is that they are not flexible enough and will lose some or all of the interest if they are withdrawn early.
The Agricultural Bank of China provides a variety of time deposit methods, including lump sum deposit, lump sum withdrawal, lump sum withdrawal, principal and interest withdrawal, and fixed life.
Below I will introduce each of these deposit methods and give some calculation formulas and examples.
2.1. Agricultural Bank of China deposits and withdrawals
Lump sum withdrawal refers to a deposit method in which a sum of money is deposited in the bank according to the agreed deposit period and interest rate, and the principal and interest are withdrawn at one time at maturity.
The advantage of lump sum withdrawal is that the interest rate is higher than that of demand deposits, and there is a fixed income guarantee.
The disadvantage of lump sum withdrawal is that it is not flexible enough, and if it is withdrawn early, it will lose all interest.
According to the latest interest rate table released by the Agricultural Bank of China, the annual interest rates of the whole deposit are as follows:
Three months: 1.25%
Six months: 1.45%
One year: 1.55%
2 years: 1.85%
Three years: 2.20%
Five years: 2.25%
This means that if you deposit 100,000 yuan into the whole deposit account of the Agricultural Bank of China according to different deposit periods, and do not use the maturity (assuming 365 days), then by October 11, 2023, the interest you can receive is:
Trimester:
Interest = deposit amount× annual interest rate × number of deposit days/365
Interest = 100,000× 0.0125×92/365
Interest = $312.33
Six months:
Interest = deposit amount× annual interest rate × number of deposit days/365
Interest = 100,000× 0.0145×184/365
Interest = $725.21
One year:
Interest = deposit amount× annual interest rate × number of deposit days/365
Interest = 100,000× 0.0155×365/365
Interest = $1550
Two years:
Interest = deposit amount× annual interest rate × number of deposit days/365
Interest = 100,000× 0.0185×730/365
Interest = $3,700
Three years:
Interest = deposit amount× annual interest rate × number of deposit days/365
Interest = 100,000× 0.022×1095/365
Interest = $6,600
Five years:
Interest = deposit amount× annual interest rate × number of deposit days/365
Interest = 100000×0.0225×1825/365
Interest = $11,250
From the above calculation results, it can be seen that the income of the whole deposit increases with the increase of the deposit period, but it should also be noted that long-term locking of funds will reduce liquidity and opportunity cost.
Therefore, when choosing the whole deposit and withdrawal, you should make reasonable arrangements according to your own capital needs and income expectations.
2.2. Introduction to other time deposit methods of Agricultural Bank of China
In addition to the whole deposit, the Agricultural Bank of China also provides some other time deposit methods, which are fractional deposit lump sum, lump sum deposit and zero withdrawal, principal and interest deposit, and fixed life.
The characteristics of these deposit methods are that they can improve the flexibility and profitability of funds to a certain extent, but there are also some restrictions and conditions.
Below I will introduce each of these deposit methods and give some calculation formulas and examples.
(1) Fractional storage and whole extraction
Lump sum withdrawal refers to a deposit method in which money is deposited in the bank in installments according to the agreed cycle and amount, and the principal and interest are withdrawn at one time at maturity.
The advantage of lump sum withdrawal is that it can adapt to people with unstable incomes or saving habits, and the interest rate is higher than that of demand deposits.
The disadvantage of lump sum withdrawals is that if you stop or withdraw early, you will lose some or all of the interest.
According to the latest interest rate table released by the Agricultural Bank of China, the annual interest rates for fractional deposits are:
One year: 1.25%
Three years: 1.45%
Five years: 1.45%
This means that if you deposit $8,333.33 (RMB100,000/12 months) per month according to different deposit periods, and do not use maturity (assuming 365 days), then by October 11, 2023, the interest you can receive is:
One year:
Interest = deposit amount× annual interest rate × average deposit days / 365
Interest = 100,000× 0.0125× (1+2+...+12)/24/365
Interest = $520.83
Three years:
Interest = deposit amount× annual interest rate × average deposit days / 365
Interest = 100000×0.0145×(1+2+...+36)/72/365
Interest = $1825
Five years:
Interest = deposit amount× annual interest rate × average deposit days / 365
Interest = 100,000× 0.0145× (1+2+...+60)/120/365
Interest = $2916.67
As can be seen from the above calculation results, the income of fractional deposits increases with the increase of deposit period, but it should also be noted that a fixed amount of deposits every month will reduce liquidity and opportunity costs.
Therefore, when choosing a lump sum withdrawal, you should make reasonable arrangements according to your income status and savings goals.
(2) Whole deposit and zero extraction
Lump sum withdrawal refers to a deposit method in which a sum of money is deposited in the bank according to the agreed deposit period and interest rate, and part of the principal and interest is withdrawn according to the agreed amount in each cycle.
The advantage of lump sum withdrawals is that they can provide a stable source of income and have higher interest rates than demand deposits.
The disadvantage of lump sum withdrawal is that if you withdraw early or stop withdrawing in the middle, you will lose some or all of the interest.
According to the latest interest rate table released by the Agricultural Bank of China, the annual interest rates for whole deposits and zero withdrawals are:
One year: 1.25%
Three years: 1.45%
Five years: 1.45%
This means that if you deposit 100,000 yuan into the whole deposit and zero withdrawal account of the Agricultural Bank of China according to different deposit periods, and withdraw part of the principal and interest according to the agreed amount every month (assuming 365 days), then by October 11, 2023, the total income (principal + interest) you can get is:
One year:
Total return = deposit amount + deposit amount × annual interest rate × average deposit days / 365
Total return = 100,000 + 100,000× 0.0125 × (1+2+...+12)/24/365
Total revenue = 100,520.83 yuan
Monthly withdrawal amount = total revenue / 12
Monthly withdrawal amount = 8376.74 yuan
Three years:
Total return = deposit amount + deposit amount × annual interest rate × average deposit days / 365
Total return = 100,000+100,000× 0.0145×(1+2+...+36)/72/365
Total revenue = $101825
Monthly withdrawal amount = total revenue / 36
Monthly withdrawal amount = 2828.47 yuan
Five years:
Total return = deposit amount + deposit amount × annual interest rate × average deposit days / 365
Total revenue = 100000+100000×0.0145×(1+2+...+60)/120/365
Total revenue = 102916.67 yuan
Monthly withdrawal amount = total revenue / 60
Monthly withdrawal amount = 1715.28 yuan
From the above calculation results, it can be seen that the total income of the whole deposit increases with the increase of the deposit period, but the amount of monthly withdrawal decreases with the increase of the deposit period.
This is because lump sum fractions distribute principal and interest equally over each period, rather than compounding.
Therefore, when choosing the whole deposit and zero withdrawal, it is necessary to make reasonable arrangements according to their own consumption needs and capital planning.
(3) Deposit principal and interest
Principal deposit and interest withdrawal refers to the deposit method of depositing a sum of money in the bank according to the agreed deposit period and interest rate, withdrawing interest in accordance with the agreed proportion in each cycle, and withdrawing the principal at one time at maturity.
The advantage of depositing principal and receiving interest is that the principal can be retained unchanged, and the interest rate is higher than that of demand deposits.
The disadvantage of depositing principal and interest is that if you withdraw early or stop withdrawing halfway, you will lose some or all of the interest.
According to the latest interest rate table released by the Agricultural Bank of China, the annual interest rates for depositing principal and interest are:
One year: 1.25%
Three years: 1.45%
Five years: 1.45%
This means that if you deposit 100,000 yuan into the Agricultural Bank of China respectively according to different deposit periods, and withdraw interest at the agreed proportion every month (assuming 365 days), then by October 11, 2023, the total income (principal + interest) you can receive is:
One year:
Total return = deposit amount + deposit amount × annual interest rate × number of deposit days / 365
Total revenue = 100,000 + 100,000× 0.0125×365/365
Total revenue = 101,250 yuan
Monthly withdrawal interest = deposit amount× annual interest rate / 12
Monthly withdrawal interest = $833.33
Three years:
Total return = deposit amount + deposit amount × annual interest rate × number of deposit days / 365
Total revenue = 100000 + 100000×0.0145×1095/365
Total revenue = 104,350 yuan
Monthly withdrawal interest = deposit amount× annual interest rate / 12
Monthly withdrawal interest = 1208.33 yuan
Five years:
Total return = deposit amount + deposit amount × annual interest rate × number of deposit days / 365
Total revenue = 100,000 + 100,000× 0.0145×1825/365
Total revenue = 107,250 yuan
Monthly withdrawal interest = deposit amount× annual interest rate / 12
Monthly withdrawal interest = 1208.33 yuan
As can be seen from the above calculations, the total income from principal and interest deposits increases with the increase of the deposit period, but the interest withdrawn monthly remains unchanged.
This is because interest on deposits is calculated on the basis of simple interest, not compound interest.
Therefore, when choosing to deposit capital and obtain interest, you should make reasonable arrangements according to your own capital needs and income expectations.
(4) Fix two stools
It refers to a deposit method in which a sum of money is deposited in the bank according to the agreed deposit period and interest rate, and part or all of the principal and interest can be withdrawn at any time before maturity.
The advantage of staying alive is that it can balance the flexibility and profitability of funds, and there is no penalty for early withdrawal.
The disadvantage of fixed two pence is that the interest rate is lower than other time deposit methods, and there is a certain minimum deposit amount and minimum withdrawal amount.
According to the latest interest rate table released by the Agricultural Bank of China, the annual interest rate of fixed and active two pennies is implemented at a six-fold discount on the interest rate of the same grade within one year.
This means that if you deposit 100,000 yuan into the Agricultural Bank of China Fixed-Life account according to different deposit periods, and do not use the maturity (assuming 365 days), then by October 11, 2023, the interest you can receive is:
Trimester:
Interest = deposit amount× annual interest rate × number of deposit days/365
Interest = 100,000 × (0.0125×0.6)×92/365
Interest = $187.40
Six months:
Interest = deposit amount× annual interest rate × number of deposit days/365
Interest = 100,000 × (0.0145×0.6) × 184/365
Interest = $435.13
One year:
Interest = deposit amount× annual interest rate × number of deposit days/365
Interest = 100,000 × (0.0155×0.6) × 365/365
Interest = $930
As can be seen from the above calculations, the income of fixed life and two pence increases with the increase of the deposit period, but it should also be noted that its interest rate is much lower than other time deposit methods.
Therefore, when choosing to live and live, you should make reasonable arrangements according to your own capital needs and income expectations.
3. Agricultural Bank of China treasury bonds
Treasury bonds are bonds issued by the state to raise funds, usually with a fixed coupon rate and maturity date.
The advantages of government bonds are that they are low risk, have a national credit guarantee, and can be bought and sold on the secondary market.
The disadvantages of treasury bonds are that they have low returns, are affected by market price fluctuations, and have certain purchase thresholds and fees.
As an agent sales agency of treasury bonds, the Agricultural Bank of China can provide customers with services such as the purchase, depository, redemption and transfer of treasury bonds.
According to the latest information released by the Agricultural Bank of China, the coupon rate of the first tranche of government bonds in 2023 is 1.50%, the issue price is 100 yuan, the maturity date is April 11, 2024, the minimum purchase amount is 1,000 yuan, and the handling fee is 0.05%.
This means that if you buy 100,000 yuan (1,000 bonds) of treasury bonds at the issue price on April 11, 2023 and do not use them at maturity (assuming 365 days), the total return you can receive by April 11, 2024 (principal + interest - handling fee) is:
Total Income = Deposit Amount + Deposit Amount × Coupon Rate - Deposit Amount × Handling Fee
Total revenue = 100000 + 100000×0.015-100000×0.0005
Total revenue = 101,450 yuan
As can be seen from the above calculations, the return of government bonds is higher than that of demand deposits and fixed life deposits, but lower than other time deposit methods.
Therefore, when choosing government bonds, you should make reasonable arrangements according to your own risk appetite and income expectations.
4. After retirement, the pension is 7,000 yuan per month, and there is a deposit of 800,000 yuan, do I still need to manage my finances?
Through the above introduction, you have learned about some common deposit methods and interest rates of agricultural banks, and you know how to calculate their earnings.
Now, you may ask, after retirement pension 7,000 yuan a month, there is still 800,000 yuan of savings, do you still need to manage money?
The answer is: of course it is!
The reasons are as follows:
First, your pension and savings may not be enough to cope with future price increases and living expenses.
According to data released by the media, the national consumer price index (CPI) rose 2.4% year-on-year in January 2023, of which food prices rose by 3.9% and healthcare prices by 2.7%.
This means that your purchasing power is declining, while your income is not growing accordingly.
If you don't manage your money, you risk losing your wealth and your quality of life.
Second, your pension and savings may not be enough to cover unexpected medical expenses or other large expenses.
According to data released by the media, the balance of national residents' savings deposits in January 2023 was 94.8 trillion yuan, a year-on-year increase of 8.6%.
This means that you are not a wealthy person, but an ordinary saver.
If you encounter some unexpected or emergency situation, such as being hospitalized with illness, family members needing support, or your home needing repairs, you may be at risk of insufficient funds and debt stress.
Finally, your pension and savings may not be enough to achieve happiness and security for you and your family.
According to data released by the media, the national residents' happiness index in January 2023 was 69.8 points, down 1.2 points year-on-year.
This means that you are not a happy person, but an ordinary person.
If you want to provide yourself or your family with a better quality of life, or realize some dreams and wishes, such as:
For example, travel, education, hobbies, etc., you may face the risk of insufficient capital and opportunity costs.
So, I recommend that you do not settle for your existing pension and savings, but actively manage your finances and let your money create more value for you.
Wealth management does not have to be complicated or high-risk, you can choose the appropriate financial management methods and products according to your actual situation and needs, such as deposits, treasury bonds, funds, stocks, insurance, etc.
You can also consult a professional financial advisor or platform for more financial knowledge and advice.
The purpose of financial management is not to make money, but to achieve the happiness and security of oneself and one's family.
As a famous financial writer put it, "Money management is not a skill, but a lifestyle." It's not just a question of money, it's about what kind of life you want to live. ”
Please note that the content of this article does not constitute any investment advice. Consult a financial professional before making any financial decisions.
Finally, I wish you a happy life, smooth work and financial success!
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