goes to the bank to deposit money, generally speaking, the longer the deposit period, the higher the interest will be. But if you go to the four major state-owned banks to deposit money, this perception may be broken. Because according to the listing interest rates of the four major banks, the three-year term interest rate is 3.15%, while the five-year term interest rate is only 2.75%. Why is the 5-year fixed interest rate even lower?
Why are the five-year fixed interest rates of the four major banks lower than those of the three-year ones?
First of all, there is no explicit provision that the fixed interest rate for 5 years cannot be lower than the 3-year period. When banks set the fixed deposit interest rate , they generally will not be lower than the benchmark deposit interest rate announced by central bank .
However, for 5-year deposits, the central bank no longer publishes the benchmark deposit interest rate. Therefore, in terms of the 5-year deposit interest rate, banks have greater room for independent pricing. In terms of the lowest interest rate, it is generally enough to be no less than the benchmark interest rate of for 3-year fixed deposits. And 2.75% is the benchmark interest rate for 3-year fixed deposits.
As for the 3-year fixed deposit interest rate, it will not be lower than 2.75% under normal circumstances. However, in order to better attract depositors to save money, a certain amount will be raised, as long as the upper limit is not exceeded. The 3.15% interest rate is completely within the adjustable range and there is no violation.
Secondly, it may be because the four major banks are relatively easy to attract deposits and have sufficient funds, so the urgency of attracting deposits is not very strong. is set according to the interest rates of the four major banks. When you deposit money, you will most likely not deposit 5-year fixed deposits. Even if you have to deposit 5-year deposits, you will not deposit them in the four major banks. This is equivalent to giving up the traffic of a 5-year deposit.
The reason why the four major banks do not care about the traffic of 5-year deposits is probably related to their own strength. As the largest banks in the country, the four major banks not only have relatively strong financial strength, but also because their outlets are spread all over the country, it is difficult for other banks to compete for deposits.
Because of this, even if you can’t get a 5-year deposit, the four major banks can easily get other deposits, and there will be no situation of tight funds and no money to be put into the pot because there is no 5-year deposit.
Again, it may be hoped to reduce the cost of attracting deposits and expand profit margins. In the context of slowing economic growth, loan interest rates are also constantly decreasing. The 5-year loan market quotation rate (LPR), one of the benchmark loan interest rates, has dropped to 4.45%.
Since the downward trend in loan interest rates is a need of the economy and society, banks are unable to stop them even as major lending institutions and can only adapt to this situation. The downward trend in loan interest rates has compressed the profit margin of banks to a smaller extent. In order to change this situation and to better cooperate with the downward trend in loan interest rates, the best way is naturally to reduce deposit interest.
Among bank deposits, the interest on 5-year deposits has the largest adjustment space, and the cost of deposit acquisition for 5-year deposits is also relatively high, so the 5-year deposit has become the biggest victim of banks in reducing the cost of deposit acquisition.
Finally, it may also be because the four major banks expect future deposit interest rates to continue to decrease. If the deposit interest rate in continues to decrease in the future, it is best for banks to absorb more short-term deposits and less long-term deposits.
Because absorbing long-term deposits means locking interest for a long time in the future. If the interest in the future is really reduced, it means that the same deposit needs to pay more interest.
Therefore, although the 5-year fixed deposit interest rates of the four major banks are lower than those of the 3-year period, they actually have their rationality.
