Some people recently reported that when they went to the bank to deposit money, they found that the bank's three-year time deposit interest rate was higher than the five-year product interest rate. At the same time, some media reporters went to visit and discovered such problems. So, is this normal?
In fact, you don’t have to be surprised by this! The so-called three-year interest rate level is higher than the five-year time deposit interest rate, which is what we often call the "inverted" interest rate phenomenon. This phenomenon is not new now. In fact, in the past, many bank deposit products has ever happened before.
So why does this "inversion" of interest rates occur?
As we all know, for banking financial institutions, deposits mean their own liabilities. If the interest rate of five-year time deposit products is set too high, more interest will be paid, which will undoubtedly increase the bank's Liability side costs. Especially with the five-year LPR (market quoted rate) interest rate level further falling, the bank's net interest margin is also constantly narrowing. Therefore, lowering the interest rate of five-year time deposit products will help stabilize the operating income of banks.
In addition, the reason for the "inversion" phenomenon of interest rates shows that banks are aware of the increasing possibility of lower deposit interest rates or even interest rate cuts in the future, so they deliberately adjust their liability structures and are psychologically unwilling to increase the number of five-year products. interest rate.
To make it easier for everyone to understand, let’s take an example. For example, the three-year time deposit interest rate of most banks is currently hovering above 3.15%, while the five-year time deposit interest rate is lower than 3.0%. If the five-year time deposit interest rate is now If the interest rate of time deposit products is higher than that of three-year terms, it will definitely attract more savers, which may absorb a large number of five-year time deposits, which will invisibly increase its own liability costs. However, once the interest rate cut channel opens one day, the signs of this happening will actually become more and more obvious. However, bank stock products will not lower interest rates at any time because of this, so they will have to bear the losses caused by the drop in interest rates. In other words , when the interest rate of five-year products after the interest rate cut is lower than before, the existing products still enjoy higher interest rates. In this case, wouldn’t it be uneconomical for banks?
Therefore, when you see the phenomenon of "inversion" in which the interest rate of a five-year time deposit product is lower than that of a three-year term, don't think it is incredible. In fact, regardless of the intentions of commercial banks themselves, domestic social retail consumption has been sluggish in recent months. In fact, it is common to stimulate consumption such as the property market. The purpose is to prevent people from saving money, let alone saving as much as five years. Long-term, in this case, it is naturally unlikely that excessively high interest rates will occur.
