On July 29, another 10 joint-stock banks collectively lowered their deposit rates.
Demand deposits generally dropped to 0.15%, and the three-year time deposit rate also dropped to 2.6%.
This is the third round of bank deposit rate cuts since April.
As deposit rates decline, loan rates also continue to fall.
According to the latest data from the central bank, the interest rate for newly issued personal housing loans in June was 4.11%, 106 basis points lower than the same period last year.
Corporate loan interest rates also hit a record low. In the first quarter of this year, the weighted average interest rate for corporate loans fell to 3.96%, 23 basis points lower than the same period last year.
"The current economic recovery is still unstable, and we need to cherish the hard-earned recovery in demand growth.
"Dong Ximiao, a researcher at China UnionPay Economics, told China Business Weekly that lowering deposit rates will help reduce financing costs and debt pressure for companies and residents, further boost confidence, stabilize expectations, promote consumption, expand domestic demand, accelerate investment, and drive a steady recovery in the economy," he said.
Why? How? What are the impacts?
Why do deposit rates continue to decline?
The downward trend in deposit interest rates is mainly affected by multiple factors.
On the one hand, the downward trend of loan interest rates has been transmitted to the deposit side. On the other hand, the downward trend of loan interest rates has been transmitted to the loan side.
Since the beginning of this year, as a series of policies to stabilize growth have been implemented and taken effect, the credit market has shown a trend of “increasing volume and decreasing prices”.
On the other hand, the downward trend in deposit interest rates is also an inevitable choice for banks to actively optimize their liability structure in the context of regular deposits.
In recent years, as savings deposits have gradually shifted from current accounts to time deposits, banks' liability costs have risen rigidly.
In order to effectively reduce liability costs, banks have proactively adjusted their liability structure and eased the pressure of narrowing net interest margins by lowering deposit rates.
At the same time, the narrowing decline in deposit rates will also help. In addition, the decline in deposit rates will also help. In addition, the decline in deposit rates will also help banks to give concessions to the real economy.
Wen Bin, Chief Economist of China Minsheng Bank, believes that the current macro-economy is in the recovery stage, and banks' initiative to make concessions to the real economy will help boost demand, increase employment, improve expectations, and accelerate repair. .
This decline in bank deposit interest rates has three characteristics.
First of all, the magnitude is large.
Compared with previous rounds, this round of interest rate declines is more significant, with interest rates on demand deposits and some short-term, medium- and long-term time deposits all declining to varying degrees.
Secondly, the scope is wide, with all types of banks participating, including state-owned banks, joint-stock banks, city commercial banks, and rural commercial banks.
Finally, the pace is fast.
After state-owned banks took the lead in lowering interest rates in September last year, small and medium-sized banks quickly followed suit since April this year, and three rounds of interest rate cuts have been carried out in just a few months.
"The reduction in deposit rates will help banks better serve the real economy.
"Dong Ximiao believes that the decline in deposit interest rates will help commercial banks to reasonably give up profits to the real economy, reduce the financing costs of enterprises and residents, and stimulate the vitality of market entities.
At the same time, it will also help transform residents' savings into consumption and investment, drive demand recovery and increase supply, and help the economy recover faster.
How does a fall in deposit rates affect savers?
A drop in deposit rates means that savers will receive less income on their deposits.
Taking ICBC as an example, the annualized interest rate of its demand deposits dropped from 0.25% to 0.2%; the annualized interest rate of one-year time deposits also dropped from 2.25% to 1.9%.
For ordinary depositors, the impact of the decline in deposit interest rates is limited.
Assuming that a depositor has 100,000 yuan of idle funds, according to the current deposit interest rate, his one-year time deposit interest income is about 1,900 yuan; if calculated according to the new deposit interest rate, his one-year time deposit interest income is about 1,900 yuan × (1-10%) = 1,710 yuan, which is equivalent to a monthly reduction of about 16 yuan.
Although it does not seem like much, this change is still worth paying attention to considering factors such as the current high price level and the possibility of continued increases in the future.
However, for investors in high-interest products such as large-denomination certificates of deposit and structured deposits, the impact of declining deposit rates is more obvious.
Taking a large-denomination certificate of deposit with a term of three years and an annualized interest rate of 3.8% as an example, if calculated according to the current interest rate, it can earn 3,800 yuan in interest each year. If calculated according to the new interest rate, it can only earn 3,040 yuan each year.
This means that investors will lose more than 760 yuan in returns each year.
How should depositors deal with the downward trend of deposit interest rates and possible further adjustments in the future? Industry insiders suggest:
First, we need to rationally plan our asset allocation strategy.
First, choose appropriate financial products for investment based on your own risk tolerance and investment goals; second, pay attention to market trends and adjust the investment portfolio in a timely manner.
Flexibly adjust investment strategies according to changes in the market environment; third, avoid blindly following the trend of investing in high-risk products to avoid unnecessary losses; fourth, pay attention to protecting personal information security and prevent risks such as telecommunications fraud.
Please use your lucky hands to like, bookmark and share this article!
Follow @加密航海家飞鱼
For more content like this ⤵️
