As the financial markets continue to evolve, more and more people choose to keep their money in banks. However, a recent notice issued by the central bank reminded depositors that there are three types of deposits that need to be extra vigilant and should not be touched lightly. So, what exactly are these three types of deposits, and why should we avoid them?
The first category: high-interest storage products
In recent years, with the rise of Internet finance, some small and medium-sized banks have launched high-interest savings products in order to attract depositors. These products are characterized by high interest rates, low thresholds, and easy operation, so they have attracted the attention of many investors. However, the central bank cautioned that high-interest savings products are often accompanied by higher risks. On the one hand, the interest rate of high-interest savings products is often much higher than the market average, which means that banks need to bear higher funding costs, and depositors may lose their principal and interest if market interest rates fluctuate or there is a problem with the bank's liquidity. On the other hand, some small and medium-sized banks may have compliance problems, such as carrying out Internet financial business without permission, which also brings hidden dangers to the safety of depositors' funds.
Type 2: Structured deposits
Structured deposit is a special type of deposit product, the principal of which is usually deposited in a bank, and the interest is linked to a certain financial derivative, such as stocks, funds, etc. As the interest rate of structured deposits is correlated with the performance of financial derivatives, their returns are often uncertain. The central bank pointed out that some banks have problems such as exaggerating returns and concealing risks when selling structured deposits, leading some investors to buy blindly. However, once the financial derivatives market underperforms, investors may be exposed to the risk of loss of principal and interest. Therefore, the central bank reminds depositors that when purchasing structured deposits, they need to fully understand their risk characteristics and make prudent decisions.
The third category: off-site deposits
Non-local deposits refer to the deposit accounts opened by depositors in banks other than the place where they are registered. Due to the differences in economic development level and financial environment in different regions, there is often a higher risk in non-local deposits. The central bank pointed out that in order to expand their market share, some small and medium-sized banks have carried out non-local deposit business in violation of regulations, which not only disrupts the financial order, but also brings hidden dangers to the safety of depositors' funds. On the one hand, non-local deposits may have problems such as difficulty in transferring funds and being unable to withdraw funds in a timely manner, and on the other hand, depositors may face the risk of not being able to recover the principal and interest in a timely manner once a bank event occurs. Therefore, the central bank reminds depositors that when choosing a deposit bank, they should choose a reputable and compliant institution and avoid depositing funds in non-local banks.
In short, the notice issued by the central bank reminds depositors that they need to make prudent decisions when choosing deposit products and fully understand the risk characteristics of the products. Investors should be extra vigilant about the three types of products, namely high-interest savings products, structured deposits and non-local deposits, and avoid blind purchases. At the same time, investors also need to pay attention to the bank's creditworthiness and compliance operation, and choose a reputable and compliant institution for deposits. Only in this way can you ensure the safety of your funds and get stable returns.