After the listed interest rate "four consecutive drops", the fixed deposit is "not fragrant"?

Reporter: Zhao Jingzhi, Li Yuwen Editor: Liao Dan

On December 22, 2023, state-owned banks such as Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, and Bank of Communications, as well as some joint-stock banks such as China Merchants Bank, lowered their deposit interest rates. After the reduction, the three-year listed interest rate of the above-mentioned banks has bid farewell to the "2 era" and dropped to 1.95%.

In fact, this is not the first time that major banks have cut interest rates. One-year fixed deposits fell below 2% and three-year deposits fell below 3%...... Since September 2022, the listed interest rate of bank deposits, which has been "silent" for nearly 7 years, has begun to "fall endlessly". The interest rate on fixed deposits of some maturities fell by 50BP (basis points), and in the past 2023, major state-owned banks have carried out three rounds of interest rate cuts.

Recently, the central bank announced that it has decided to reduce the deposit reserve ratio of financial institutions by 0.5 percentage points from February 5, 2024, and by 0.25 percentage points from January 25, 2024.

Although the reduction of deposit interest rates will help reduce financing costs, for conservative investors who prefer deposits, deposit interest rate cuts are "painful", and as banks' net interest margins narrow, deposit rates will continue to fall.

At present, it is the year-end bonus distribution season, what is the situation of bank deposits in the market, what are the deposit "alternative" products, what are the characteristics, and what aspects need to be paid attention to? How to save the year-end bonus is more cost-effective, which has become the most concerned issue for conservative investors......

Bank interest rate spread pressure is transmitted, and there is still room for deposit rates to be lowered Data source: public information Visual China map by Liu Hongmei

Deposit interest rates have fallen again and again, and some fixed purchases still need to be "grabbed"

Since 2022, major commercial banks have adjusted their deposit rates in September 2022, June and September 2023, as well as in December 2023, which has led to the reduction of deposit rates for small and medium-sized banks.

Taking ICBC as an example, before September 2022, the bank's one-year, two-year, three-year and five-year lump sum deposit and withdrawal interest rates were 1.75%, 2.25%, 2.75% and 2.75% respectively. After four downward revisions, they were 1.45%, 1.65%, 1.95% and 2.0%, respectively.

Although the deposit interest rate has been lowered again and again, how many customers have purchased deposits? In the course of the "Daily Economic News" reporter's visit, many bank wealth managers still blurted out that "a lot" and "want to grab."

The reporter previously learned from the staff of a Shanghai branch of Ping An Bank that the bank's "Ping An Deposit" fixed deposit has an annualized interest rate of 2.8% for three years of 50,000 yuan and 2.85% for 500,000 yuan. Only a few days later, when the reporter consulted again, the other party informed that there was no quota for the aforementioned 50,000 products with an annualized interest rate of 2.8%. At present, among the products for sale in the Ping An Bank APP, the annualized interest rate of the three-year fixed deposit of 500 yuan is 2.55%, and the annualized interest rate of 10,000 yuan is 2.60%.

In addition to ordinary deposits, generally speaking, the starting point of large-denomination certificates of deposit is higher, and the interest rate is more advantageous than that of ordinary fixed deposits. However, after this interest rate cut, the interest rate on large certificates of deposit has also converged with that of ordinary regular deposits. According to the reporter's inquiry on the ICBC APP, the bank's large-amount certificates of deposit start at 200,000 yuan, and the interest rates for one-year, two-year, and three-year periods are 1.8%, 1.9%, and 2.35% respectively, compared with the highest interest rate of ordinary lump sum deposits and withdrawals of various periods, and the interest rate on large-amount certificates of deposit for one year and below is 0.1 percentage points higher than that of ordinary fixed deposits.

A staff member of a sub-branch of China Merchants Bank in Shenzhen said that the bank no longer has three-year large-value certificates of deposit, and currently only has two-year and one-year products. "There are only ordinary deposit products with three-year tenors, but in fact, the interest rate is the same, and today our three-year ordinary deposit interest rate is 2.6%. ”

The staff said that the three-year ordinary deposit quota for sale today has also been sold out, "the quota will be gone in about an hour, and there will be a minute or two before the quota will be sold out." ”

According to a staff member of the Industrial Bank, the bank currently has no quota for three-year large-amount certificates of deposit with a minimum deposit of 200,000 yuan, and the minimum deposit for ordinary time deposits is 50 yuan, and the three-year interest rate is 2.6%.

According to the latest information on the Industrial Bank APP, the interest rate on the bank's three-year large-amount certificates of deposit with a minimum deposit of 200,000 yuan has been reduced to 2.60%, the interest rate on the same term time deposit (Fuyunjin) has also dropped to 2.60%, and the interest rate on the three-year large-amount deposit and time deposit is the same.

"In the case of large certificates of deposit (interest rate), we can also do it on a regular basis, and the interest rate is the same. A staff member of the Industrial Bank said that the interest rate may be lowered this year, "after the RRR cut, there may be an expectation of an interest rate cut, and all the deposit rates may be lowered later." ”

"If you are interested in buying a fixed deposit, you should do it as soon as possible, because it is uncertain whether the interest rate will fall again in the future. The financial manager of a Shanghai branch of the Bank of Communications also said.

In addition, the reporter learned during the visit that higher deposit rates may also be accompanied by stricter purchase thresholds. The financial manager of a branch of Shanghai Pudong Development Bank previously told reporters that the bank's three-year interest rate on large-amount certificates of deposit is 2.9%, which is only exclusive to new customers, and the conditions are relatively strict. However, when the reporter consulted the new customer again about the large-amount certificate of deposit, the account manager said that there is no three-year product for the new customer now, and the current maximum one-year term for the new customer's large-amount certificate of deposit is 2%.

Chasing high interest rates across provinces, non-local deposits need to be cautious

Against the backdrop of declining deposit rates, some small and medium-sized banks still have deposit products that maintain relatively high interest rates. For example, the current listed interest rate of Bank of Sichuan is 3.15% for three years and 3.35% for five years. In addition, the three-year lump sum deposit and lump sum withdrawal interest rate of Bank of Guilin is 2.8%, and the five-year deposit rate is 3.1%. In addition, the current listed interest rate of Bank of Guiyang's 3-year deposit products in Chengdu is still above 3%.

However, it is worth noting that if the local bank does not have a branch outside the province, it will require foreign customers to open an account and deposit locally. In order to achieve higher interest rates, a number of deposit "special forces" have been born this year.

Specifically, at present, the medium- and long-term interest rates of national banks are low, while the interest rates of small and medium-sized banks in some areas are high, and the "special forces" with low risk appetite have opened deposits in small and medium-sized banks with high interest rates from one city to another in order to obtain higher deposit interest rates.

Although the interest rate on foreign deposits is relatively high, there are still various inconveniences in practice.

"Now we can all open a card normally, you only need to provide your ID card and real-name mobile phone number to open a card. However, if it is not a counter, people from other provinces need to be restricted. That is, your bank card can only be operated at the counter of our Bank of Sichuan. When the reporter inquired about the identity of depositors from other places, the staff of a branch of the Bank of Sichuan responded.

In general, the "special forces" need to consider the withdrawal of money in addition to the various expenses on the way. Under the current situation of stricter conditions for preventing telecom fraud, anti-money laundering and bank card application, inter-provincial deposits and withdrawals may be restricted to counter-only transactions. If the consumer does not have a bank branch in their location, they may still need to find a branch counter to withdraw money or withdraw early.

Pressure on bank interest rate spreads There is still room for deposit rates to be lowered

The reduction in deposit rates, which began in September 2022, is also the first time since 2015 that a state-owned commercial bank has lowered its deposit rates. Li Yong, the fixed income team of Soochow Securities, said that the current deposit interest rate as a whole shows the characteristics of higher frequency of reduction, and the longer the term, the greater the reduction.

Although commercial banks have continued to reduce deposit interest rates, the cost of bank deposits has not been effectively reduced. Guosheng Fixed Income Yang Yewei estimates that the average deposit cost of listed banks in the first half of 2023 will also increase by 3bps to 2.17% from the end of last year.

Regarding the reduction of deposit interest rates and the rise in deposit costs, Yang Yewei said that this is mainly due to two reasons.

The first is the change in the deposit structure. In the process of falling interest rates, the proportion of demand deposits continued to decline, and the proportion of time deposits continued to rise.

Second, the cost of corporate demand deposits continues to rise. Due to the increasing difficulty of corporate loans, banks need to provide higher deposit returns to enterprises to enhance their enthusiasm for loans, so the cost of corporate demand deposits has continued to increase in the past few years, and corporate demand deposits are the only sub-item in which the cost of various types of deposits continues to rise.

At present, a number of institutions have said that banks will face more severe pressure on net interest margins.

"Given that net interest margins have fallen to low levels, the pressure will be passed on to the deposit side. The cost of deposits needs to be reduced more substantially. However, the trend of fixed deposit and the rising interest rate of corporate demand deposits are increasing the average cost of deposits, which means that the fixed interest rates of various deposits need to be lowered more sharply to promote the decline of the overall cost of deposits. That is, the deposit rate needs to fall at an accelerated pace. Yang Yewei said.

The Ming Ming team of CITIC Securities said that in the face of the current complex business environment, reducing the cost of bank deposits is still a key work direction. As residents' risk appetite remains low in the short term, it is expected that the size of deposits will continue to rise even if the deposit rate is lowered.

Asset Allocation What are the other options for capital protection products?

After deposit rates fell, some savers turned to other avenues of investment.

According to the bank's wealth management manager, there are currently three types of principal-guaranteed products, namely deposits, savings treasury bonds, and bancassurance products. As deposit rates continue to fall, many people are focusing on savings bonds and bancassurance products.

Savings Bonds:

Offline queuing, online "second light"

Savings treasury bonds refer to a kind of non-negotiable treasury bonds issued by the government of a country to individual investors for the purpose of absorbing personal savings funds to meet the needs of long-term savings investment.

A staff member of China Merchants Bank told reporters that the interest rate of the latest issuance of savings bonds was 2.63 percent for three years and 2.75 percent for five years. "Basically, the yield on deposits and government bonds is going hand in hand, and if it is lowered, it will be lowered together. ”

Taking the past 2023 as an example, the reporter noticed that last year's savings bonds also experienced several "interest rate cuts". The interest rate of the savings treasury bonds (certificated) issued in March was adjusted from 3.05% for the three-year and 3.22% for the five-year period to 3% for the three-year and 3.12% for the five-year period; the interest rates for the three-year and five-year savings bonds issued in May were lowered by 5 basis points to 2.95% and 3.07% respectively, which was also the first time in recent years that the coupon rate of the savings bonds fell below 3%, and the interest rates of the three-year and five-year savings bonds (electronic) issued in July were reduced to 2.85% and 2.97% respectively. The interest rate on savings bonds (electronic) issued in October was reduced to 2.63% for 3 years and 2.75% for 5 years.

The last issue of savings bonds in 2023 was issued in November of that year, and the reporter learned during the visit that the interest rate on savings bonds is also declining, but sales are still hot. The financial manager of a branch of ICBC in Shanghai told reporters, "Online (online banking consignment) has always been selling 'second light', just like grabbing concert tickets." "Certificate-type savings bonds are sold over the counter of outlets, which is also difficult to grab. "The amount of treasury bonds will be allocated to outlets, and only 2 of the 15 outlets in our region have quotas for the treasury bonds issued in November, and the quota is not much, so you may have to queue up early and rank first or second to buy. ”

The reporter noted that compared with ordinary bank time deposits, savings treasury bonds have the characteristics of being able to pay interest on an annual basis and be redeemed in advance to calculate interest.

Bancassurance Products:

Stretch the long-term horizon for long-term stable income

In the context of the continuous reduction of deposit interest rates, some savings insurance products have been favored by many customers because they can lock in long-term stable income, and have also become the main products that banks focus on consignment.

"Like a five-year investment dividend insurance, the income is guaranteed and dividends, and the dividends are uncertain. The determined income is about a few points, and if you add dividends, the final rate of return is about 3.3%~3.5%. According to the staff of China Merchants Bank, in addition to participating insurance, there are also whole life insurance and annuity insurance with a long term.

It is worth noting that a number of staff members stressed to reporters that bancassurance products are mainly to meet the allocation of medium and long-term funds, and there may be losses in early withdrawal in the short term.

If the incremental whole life insurance policy is drawn down early within the premium payment period, its cash value may be less than the fees paid. "It depends on the cash value of each bancassurance product, and some products have not returned to their principal after five years, so it cannot be collectively said that it is capital protected, insurance is a configuration, a configuration of demand. A financial manager told reporters that each product is different, some have been paid back in five years, and some may take six or seven years, seven or eight years. Therefore, if you want to buy insurance, you need to look at its cash value, and only when it reaches the corresponding number of years can it play a role in increasing the interest of the insured amount.

According to the manager, the cash value is the sum of principal and interest that can be withdrawn if the policy is surrendered or at a certain point in time. "There are some insurances that may not have a cash value in a year or two depending on the insurance set, so it is important to understand and be specific to each insurance product. ”

In the current environment of declining market interest rates, "locking in income" is also an advantage that wealth managers frequently emphasize when recommending bancassurance products.

From the second policy year, the annual insurance amount will increase by 3.0% of the basic insurance amount annually, and the cash value will not be affected by market fluctuations, and it will increase steadily year by year. "The cash value of each year is written in the contract, so there is no need to worry about security. ”

In fact, since 2022, the predetermined interest rate for incremental whole life insurance has undergone a wave of reductions. "Almost the same product, in June 2022, it was still 3.8%, a month later it dropped to 3.5%, and by the end of July 2023, all the increased whole life insurance with a predetermined interest rate of 3.5% was discontinued, and then it was reduced to 3%, which is still quite a big drop. ”

"The advantage of it [increased whole life insurance] is not reflected in the 3% interest rate, but in the 'locked-in' 3%, which will remain stable at this level of income in the long run." Although bank fixed deposits can be transferred after maturity, they are also forced to accept the interest rate level at the time of transfer, and at present, the interest rate is likely to continue to fall, so the charm of locking is great. ”

In addition, it is worth noting that in addition to the products distributed by banks, some wealth management products with relatively stable returns can also be bought through brokerage channels, such as reverse repo of treasury bonds and brokerage income certificates.

At present, the income certificate of the brokerage can promise to "protect the principal". A number of brokerages have set up a "capital preservation zone" on their own APPs, and clearly reflected the word capital protection in the contract.

Generally speaking, the minimum subscription amount for fixed income certificates is 50,000 yuan, which is increased by an integer multiple of 10,000 yuan, and the number of investors is required to be no more than 200.

In terms of yield, different brokerages have different yields. Taking GF Securities as an example, the brokerage's 28-day, 91-day, 182-day, and 360-day product yields on January 29 were 2.25%, 2.40%, 2.50%, and 2.55%, respectively. In addition, for example, Dongguan Securities on January 24 on the sale of "Yueyuexin" September No. 41, the yield is 2.8%.

National Business Daily