Nowadays, more and more people choose to deposit time deposits. According to the central bank, in the first quarter of 2024, the per capita deposits of mainland residents increased by about 6,114 yuan, and by the end of March, the per capita deposits were 108,400 yuan. The main reason why people like to keep their money in the bank is to cope with future problems such as unemployment and illness. In addition, now the risk of investing in the stock market, funds, and bank wealth management products is relatively large, and some people who are averse to investment risks will take out their money and deposit it in the bank on a regular basis.
In the face of depositors' increasing enthusiasm for depositing money, some bank managers told the truth that they should pay attention to the "4 don'ts" for fixed deposits, and many people unfortunately fell into the trap. The "4 Don'ts" are: (1) don't blindly pursue high interest rates, (2) don't keep all your deposits in one bank, (3) don't save for too long, and (4) don't ignore inflation. Let's find out:
First, don't blindly pursue high interest rates
Nowadays, the interest rate on deposits in large state-owned banks is getting lower and lower. As a result, some small and medium-sized banks, such as village and township banks and private banks, have given very high deposit interest rates in order to absorb depositors' deposits. And many depositors just want high interest rates, so they deposit their money in small and medium-sized banks. However, these small and medium-sized banks may go bankrupt due to their small assets and weak operation and management capabilities. Therefore, when depositors save money, in addition to pursuing higher interest rates, they should also consider the risk of small and medium-sized banks depositing money.
Second, don't put all your deposits in one bank
There is a saying in the investment world: "Don't put all your eggs in one basket". For depositors, it is better not to keep all their deposits in one bank, and it is better to keep them in several banks, so as to spread the investment risk. Moreover, the deposit + interest deposited in each bank should not exceed 500,000. In this way, even if a bank goes bankrupt, the depositor's deposit will be compensated in full.
Third, don't save for too long
Many depositors like to save 3 or 5 years of time deposits, in addition to putting money in long-term deposits can get a higher deposit interest rate, now the deposit interest rate is showing a downward trend, if you deposit long-term deposits can lock in the interest rate. However, time deposits for more than 3 or 5 years will also encounter liquidity problems.
If the depositor needs to withdraw the deposit in advance, it will be calculated as the demand deposit rate. Therefore, depositors should also consider the liquidity of deposits when depositing time deposits. If there is no guarantee that you will not withdraw this deposit in advance in the future, it is recommended that you save a fixed deposit for 1-2 years.
Fourth, don't ignore the impact of inflation
Starting in 2023, domestic deposit rates are getting lower and lower. After entering 2024, the interest rate on three-year bank deposits will fall to less than 3%, and the interest rate on one-year bank deposits will fall to less than 2%. At the same time, the prices of commodities that are closely related to the lives of ordinary people in China are constantly rising. In fact, the income from bank deposits certainly cannot outpace the rate of price increases. Over time, the purchasing power of depositors' fixed deposits has been shrinking.
In this regard, we recommend that you can adopt a diversified asset allocation. For example, in addition to fixed deposits, you can also purchase some low-risk investment varieties such as bond funds, large-amount certificates of deposit, structured deposits, and treasury bonds to maximize asset returns. While diversifying asset allocation won't necessarily outperform current inflation, it's better than buying a fixed deposit with all your savings.