Recently, Minsheng Bank and China Merchants Bank announced that they will stop selling large deposit products with a term of half a year or more. Small and medium-sized banks have joined the “interest rate cut” army on deposits, and high-interest deposit collection tools such as manual interest compensation, smart deposit notifications, and medium- to long-term large deposit slips have all been adjusted.
Market participants analyzed that behind the successive adjustments of these “popular” deposit products, in addition to regulatory factors, banks can also adjust deposit structures and reduce debt costs, thereby easing the downward pressure on interest spreads.
Under the downward trend in interest rates, long-term products may lock in excessive debt costs, so long-term large deposit products are in high demand, and five-year large deposit certificates are almost extinct.
However, Blue Whale News noticed that the Bank of Shanghai has recently been promoting the “Mindful Deposit” special deposit. While its interest rate is comparable to a large deposit slip, the minimum deposit threshold is much lower.
According to a marketing text message from the Bank of Shanghai, the bank launched a “Stable Heart” (welcome deposit) term deposit, starting at 100 yuan, with a three-year interest rate of 2.4%, a two-year interest rate of 2.2%, and a one-year interest rate of 2%.
If you check the Bank of Shanghai app, you can find that the starting deposit amount for the desired deposit product ranges from 100 yuan, 1,000 yuan, 10,000 yuan, and 50,000 yuan. The higher the starting amount, the slightly higher the annual interest rate, and the product period ranges from 3 months to 3 years, respectively.
Currently, with the exception of 3-year products, all grades of products have basically been sold out, and there are quotas for all other grades. A 3-year product with an annual interest rate of up to 50,000 deposits is the highest, at 2.63%. This interest rate has even surpassed the interest rates of many banks with large deposits of 1 million or more.
Referring to the differences between specialty deposits and traditional term deposits, the staff explained that compared to ordinary time deposits, “specialty deposits” have an advantage in interest rates, and interest rates on some “specialty deposits” even surpass those of large deposits during the same period. However, specialty deposits may target specific regions or specific customer groups, and must meet the product conditions before purchasing.
Judging from the product introduction, specialty deposits are deposit products; they are essentially time deposits. Within RMB 500,000, it is covered by deposit protection in accordance with deposit insurance regulations. What's different is its diverse starting points and interest rates that are superior to ordinary deposits.
Other than the Bank of Shanghai's “stable mind,” similar specialty products are not uncommon on the market. Examples include “Bank Profit Multi” introduced by Agricultural Bank, “Enjoy Fixed Deposit” introduced by China Merchants Bank, “Wangcai Deposit” by China Construction Bank, “Bank Profit Multi” by Agricultural Bank, and “Safe Deposit” of Minsheng Bank's specialty savings accounts.
Among them, Minsheng Bank's “Safe Savings” is also a 5-year product, with an annual interest rate of 2.65% for deposits starting at 1,000 yuan. Meanwhile, China Construction Bank's Wangcai Deposit, one of the six major banks, also has a 5-year product, and the interest rate for deposits starting at 10,000 yuan has reached 2.4% per annum.
CMB's “Enjoy Fixed Deposit” specialty products are less than those of the above two, but the product line is richer. Its monthly deposit products are automatically deposited every month according to the agreed date, and the monthly principal and interest are automatically recorded after expiration.
In addition, smart notification deposit products that have recently been removed on a large scale by banks have also emerged as upgrade alternatives.
China CITIC Bank announced that it will be removed from the shelves on May 15, 2023, but a new “upgraded” product was introduced soon. According to the product description, the newly launched Freely Enjoy is a three-month installment, which supports the renewal of principal and principal and interest at maturity, with an annualized interest rate of 1.65%.
Industry insiders said in this regard that the logic behind this product is to replace the “smart notification deposit” with a regular three-month period with automatic renewal, and the automatic cycle period changed from 7 days to 90 days, which is a disguised upgrade of the “smart notification deposit.”
The core of intelligent notification deposit is that it omits the “customer's advance notification” and “timely withdrawal after customer notification”, and can automatically roll over.
Currently, the bank's three-month full deposit and full deposit listing interest rate is 1.15%, while the upgraded annualized interest rate of 1.65% is obviously much higher. Also, since the product is essentially a deposit, protected by deposit insurance, and risk protection, it is obviously more attractive.
However, what is unclear is that previously, regulations required banks to stop notification deposits that do not require customer operation or intelligent automatic rollover. Will automatic rollover short-term term deposits be included in the future?