Another interest rate cut! Where can you still find "high-yield" options?

October 18th, 8:00 AM, Shanghai.

Many bank branches already have lines in front of them. At this moment, as it is the time for monthly salary distribution, many depositors are rushing to adjust and allocate their financial wages.

At 8:30 AM, the banks opened on time, and at the same time, shocking news came out - the six major banks collectively announced an interest rate cut. The interest rates for various deposit terms were uniformly reduced by 25 basis points (0.25%).

The elderly lady at the front of the line quickly picked up her phone to consult her family:

"Daughter, something bad happened, the interest rates have been lowered, what should we do?"

This is actually a question that many people are asking.

Interest Rate Reduction by Six Major Banks

In the early morning of October 18th, the six state-owned banks (ICBC, Bank of Communications, Bank of China, CCB, ABC, Postal Savings Bank) almost simultaneously announced a reduction in the RMB deposit benchmark interest rates.

The actions of the six major banks in adjusting interest rates were quite consistent.

The benchmark interest rates for three-month, six-month, one-year, two-year, three-year, and five-year fixed-term deposits were all reduced by 25 basis points to 0.80%, 1.00%, 1.10%, 1.20%, 1.50%, and 1.55% respectively.

At this time, it has been less than three months since the last interest rate cut by the six major banks.

Sixth Round of Interest Rate Cuts in Two Years

In fact, this is the sixth round of interest rate cuts by domestic commercial banks since September 2022.

If you have saved money during this period, you probably have felt that "the interest on deposits is decreasing year by year" and "the deposit rates are lower each quarter".

According to statistics, before the first round of interest rate cuts within two years on September 15, 2022, the five-year fixed-term deposits of large state-owned banks had an annual interest rate of 2.75%.

Today, two years later, it is only 1.55%.

With six interest rate cuts in two years, a total reduction of 1.2% has been made.

For depositors, two years ago, saving a five-year fixed deposit could earn 13,750 yuan in interest, but now it is only 7,750 yuan, a decrease of 46%.

Why the Continuous Reduction?

So why have banks continuously reduced deposit interest rates multiple times?

One direct reason is that loan interest rates are also being reduced.

In the past two years, in order to stimulate real estate consumption and support high-quality economic development, banks have actively and passively adjusted loan interest rates multiple times. There have been two arrangements for reducing existing home loan rates.

The second reduction in existing home loan rates is expected to start in late October, benefiting around 50 million households and reducing annual interest expenses for families by approximately 150 billion yuan (as stated by the Governor of the People's Bank of China).

After such significant adjustments, the interest rate spread between deposits and loans for banks continues to narrow. In order to balance their books, banks must gradually reduce deposit interest rates to stabilize the interest rate spread between deposits and loans Looking back now, the timing of this interest rate cut is quite worth savoring.

Where to Find "High Yields"?

So, what other relatively "high-yield" financial options are worth paying attention to at the moment?

There are at least a few options worth trying.

First, seize the "timing difference" of interest rate cuts.

According to the usual practice of the previous five interest rate cuts, large state-owned banks are the first to announce interest rate cuts. Subsequently, national joint-stock banks, large city commercial banks, large rural commercial banks, small and medium-sized banks, and rural banks will follow one after another, and this process generally lasts for several months.

Therefore, when the rumors of the sixth interest rate cut have already come out, it makes sense to manage your deposits and financial products in banks that have not yet announced interest rate cuts.

Taking nationally-owned joint-stock commercial banks that have not yet announced interest rate cuts as an example, among them, Hengfeng Bank and Bohai Bank historically belong to a group with relatively higher deposit rates.

As of the afternoon of October 18th, Hengfeng Bank's listed interest rates for personal time deposits of three months, six months, one year, two years, three years, and five years were 1.10%, 1.35%, 1.55%, 1.70%, 2.10%, 2.10% respectively. These rates are 0.3, 0.35, 0.45, 0.5, 0.6, 0.55 percentage points higher than the relevant rates of large state-owned banks after this interest rate cut.

Similarly, Bohai Bank's listed interest rates for personal time deposits of three months, six months, one year, two years, three years, and five years were 1.13%, 1.39%, 1.55%, 1.70%, 2.1%, 2.1% respectively. These rates are 0.33, 0.39, 0.45, 0.5, 0.6, 0.5 percentage points higher than the relevant rates of large state-owned banks after this interest rate cut.

Attached Image: Hengfeng Bank Deposit Rate Table (October 18th)

Grasp the "Special Zone"

In relatively smaller city commercial banks and rural commercial banks, deposit interest rates are often more competitive, and there may be different gains in some special zones.

For example, in its Jinghui Savings channel, Beijing Bank offers a special deposit for personal pension, with a 3-year annual interest rate of up to 2.35%.

For the "Little Jingbao" account for children, there are also preferential deposit rates, with a 3-year fixed deposit rate reaching 2.3%.

Some joint-stock banks, city commercial banks, and rural commercial banks have special deposit products for certain regions, which is also worth understanding more.

Large-denomination Certificates of Deposit and Wealth Management

In addition, it is worth paying special attention to the interest rates of large-denomination certificates of deposit offered by various banks.

For example, Shanghai Bank's channel for large-denomination certificates of deposit offers a yield of 2.05% for some 1-year term deposits, which is significantly higher than the general time deposit interest rates for the same period.

Furthermore, various banks also offer distinctive wealth management products in their wealth management channels, and the yields of some low-risk products are worth focusing on