At present, the one-year deposit interest rate for U.S. dollar deposits in some domestic banks is as high as 5%. Yesterday, someone asked me whether it would be more profitable to convert RMB into U.S. dollars and deposit it in a bank. The deposit interest rate of 5% is indeed ve

At present, the one-year deposit interest rate for U.S. dollar deposits in some domestic banks is as high as 5%. Yesterday, someone asked me whether it would be more profitable to exchange RMB for U.S. dollars and deposit it in a bank. The deposit interest rate of 5% is indeed very high, much higher than the general one-year RMB time deposit interest rate. But when you exchange RMB for U.S. dollars to deposit in a bank, you must consider the possible loss of income caused by the following three risks.

First, the current US dollar deposit interest rates of domestic banks are very different among banks. The large state-owned banks are very low, with a one-year term of basically about 1%. The interest rates of joint-stock banks are indeed higher. Some banks have a one-year US dollar time deposit interest rate of 5% or even higher, such as Bank of Nanjing, Hengfeng Bank, Hangzhou Bank, Industrial Bank, etc. The annualized return of a US dollar structured deposit of Industrial Bank is 5.8%. So you have to choose the right bank. Please note that some banks only offer this type of business over the counter.

Second, we need to take into account the risks caused by exchange rate fluctuations. The current US dollar to RMB exchange rate is about 7. Since the US dollar interest rate hike cycle has peaked, it is generally expected that the US dollar interest rate hike will gradually decrease, so the possibility of the US dollar RMB exchange rate continuing to rise sharply is not very high. Of course, considering the global and domestic economic background, the possibility of a sharp rise in the RMB is also not great. In any case, exchange rates fluctuate. Once the dollar rises, you will get more benefits in addition to interest rates, and vice versa.

The third is to consider the price difference between the bank's settlement and sale of foreign exchange. When the exchange rate remains unchanged, there will be a loss in price difference when settles and sells foreign exchange . Take today's US dollar listing price of Industrial and Commercial Bank of China as an example. The bank's selling price is 6.99 and the bank's buying price is 6.96. Taking ten thousand US dollars as an example, if you exchange RMB for ten thousand US dollars and then exchange the US dollars back for RMB, there will be a loss of about 0.5% of the difference.