Since the beginning of 2023, the mainland banking sector has experienced three consecutive sharp interest rate cuts. Nowadays, the interest rate on 3-year fixed deposits has fallen to less than 3%, and the interest rate on 1-year fixed deposits has fallen to less than 2%, and the deposit interest rate is at a historically low level. Deposit rates are expected to fall further in 2024.
The main reason why banks continue to lower deposit rates is that the central bank hopes that depositors will take money out of the banks for consumption and investment, so as to stimulate the growth of the domestic economy. In this regard, many savers have also said that with such a low interest income, it is better to take out the money for investment and consumption, which is more realistic.
However, some bank managers have a conscience and suggest that after the deposit interest rate is reduced, the people should still hold their money tightly and honestly keep their money in the bank. There are two main reasons for this:
One is that no matter how low the interest rate on bank deposits is, as long as there is no zero interest rate, depositors should still deposit their deposits in the bank. Because bank deposits are the safest way to invest and manage your money. The other is that if you withdraw your savings for consumption because the deposit interest rate is getting lower and lower, you will only know the importance of saving money when you encounter problems such as unemployment and illness in the future and need money urgently. When you don't have money around you, no one will give you money.
We agree with the conscientious advice of the bank manager, and the reason why we suggest that no matter how the bank deposit interest rate is reduced, depositors should continue to keep their money in the bank for the following three reasons:
First, most depositors lack the knowledge and skills of investment and financial management, and the risk of blind investment will be very large, so it is a wise choice to keep money in the bank, at least the safety of the principal and interest is guaranteed. In June last year, Aunt Wang, a depositor, saw that the deposit interest rate had been lowered, so she decided to withdraw her 240,000 deposits and buy open-end funds.
In this regard, the bank staff reminded Aunt Wang that although the return on buying the fund is higher, the risk is still relatively large. However, Aunt Wang did not listen and insisted on buying the fund. As a result, a few months later, Aunt Wang took out the money from the investment fund and deposited it in the bank. Of the 240,000 yuan invested at the beginning, there are now only more than 180,000 left. There are many customers like Aunt Wang who lack financial knowledge and invest blindly.
Second, the current investment environment is not good, and it is risky to invest in high-yield varieties. People with investment experience will still choose to keep their money in the bank. At the end of last year, the A-share market fell below 3,000 points, and the vast majority of shareholders suffered heavy losses. After buying open-end funds last year, many people lost between 20-30%.
It is worth mentioning that now the bank wealth management products are no longer guaranteed principal and interest, once the bank wealth management products have losses, all the losses will be borne by depositors. In addition, the expected annualized rate of return of many banks' wealth management products is more than 4%, but in fact, the expected and actual rate of return are not the same. The yield of some banks' wealth management products is only 1%, which is not as high as the interest income from time deposits.
Third, the reason why the central bank wants to reduce the interest rate on deposits now shows that the investment environment and economic conditions are not very good, otherwise there is no need to encourage everyone to invest and consume by cutting interest rates. Since the investment environment and economic situation are not good, it is necessary to learn to rest. Throughout the ages, real investment masters know how to rest, as long as they keep their principal intact, there will be a lot of investment opportunities in the future.
And those money-makers who shout every day to invest eventually lose all their funds without exception. Therefore, savers should learn to rest better, only when the stock and real estate asset bubbles are squeezed dry, and then you take out your savings to speculate on the historical bottom, the probability of success will increase significantly. It is important to know that major historical opportunities are waiting for them, not rising them.
Nowadays, as soon as many people see that the deposit rate has fallen, they are in a hurry to withdraw their money and use it for investment in other areas. In this regard, some bank managers reminded everyone: even after the deposit interest rate is reduced, it should continue to deposit in the bank. At the very least, this ensures the safety of principal and interest. And we believe that now we should be more firm in our belief in saving money, and do not easily take out money to invest and spend:
1. Most depositors lack investment skills, and the risk of losing money by blindly entering the market will be very great; 2. The current investment environment is not good, and if you don't do it well, you will lose the principal; 3. Keeping money in the bank is only an expedient measure, and you can only wait until the asset bubbles such as stocks and real estate are squeezed dry. If you take out the money and use it to buy the bottom, you can become a big winner in life. Therefore, there is no shame in keeping money in the bank, it is precisely a wise decision to #high-quality author list#.