Recently, media outlets have been widely reporting that the interest rates on Renminbi (RMB) deposits have been lowered once again, with even the large-denomination certificates of deposit with a starting point of 200,000 yuan for terms of 3 years and 5 years experiencing successive reductions.

Now, the biggest confusion for many depositors is how to save money to maximize their returns.

In recent days, with the US dollar's interest rate hikes, the RMB exchange rate has broken through 7.1, and everyone has suddenly realized that the US dollar is continuously appreciating, and the interest rates on US dollar deposits are also rising higher and higher. The solution was right beside us all along.

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During this period, the interest rates on US dollar fixed deposits offered by many domestic banks have been increasing. Many one-year products have interest rates exceeding 3%, which is already a two percentage point increase compared to last year.

At the same time, while RMB deposits have dropped from 3.7% to around 3% now, US dollar deposits have unexpectedly increased from less than 2% last year to over 3% now.

A one-year US dollar deposit offered by Zheshang Bank has an interest rate as high as 3.79%. The one-year US dollar deposit offered by Jiangsu Bank has an annual interest rate of 3.6% for a corresponding amount of 10,000 US dollars.

There are also many banks such as Shanghai Pudong Development Bank and Ningbo Bank, where the interest rates on US dollar deposits have significantly increased and are higher than the interest rates on RMB deposits of the same term.

02

Some bank financial managers have told depositors that saving in US dollars now can yield two additional benefits: the first is the additional interest income, and the second is the additional exchange rate income.He gave an example: suppose you exchange 71,000 yuan for 10,000 US dollars now, and deposit it for a one-year term, you can earn an annual interest rate of 3.6%, which is only 1.8% for a one-year term deposit in yuan, and the interest rate alone has already doubled.

If the yuan continues to depreciate and the US dollar continues to appreciate, not only will you earn more interest after one year, but you can also gain more by exchanging back into yuan.

However, I would like to remind everyone that there are many uncertain factors in the above example.

Firstly, the trend of exchange rates is based on the assumption that the US dollar will continue to appreciate in the future. But the reality is that the US dollar has already risen above 110, which is at a historical high level, and there are not many times in history that it has exceeded 110.

Looking at the current yuan exchange rate is also similar. The current offshore yuan exchange rate has broken through 7.13, and there are very few times in history that it has broken through this level. Moreover, after breaking through 7.1 in the previous few times, the yuan has seen a significant reversal in the following few months.

Therefore, if you really take out 71,000 yuan to exchange for 10,000 US dollars and deposit it in a fixed deposit now, it is very likely that after one year, you can only get back the principal of 10,000 US dollars, but you can't exchange it back into 71,000 yuan. If the exchange rate returns to 6.5, then you can only exchange it back into 65,000 yuan.

Although the deposit interest has earned more money, it is possible to lose a lot on the exchange rate.

Moreover, there is one more point that everyone needs to pay attention to: there is a large difference in buying and selling foreign exchange in banks.For example, if you currently want to buy US dollars, according to the latest exchange rate of a certain bank, you would need to pay 71,300 yuan for 10,000 US dollars. However, if you buy 10,000 US dollars and immediately exchange it back to yuan, you might only get back 71,000 yuan.

This is because the buying price and the selling price are not equal, and this price difference is the normal fee charged by the bank.

If it's exchanging notes instead of currency, this price difference could even be as high as 800 yuan.

After all, we are in China. If we buy US dollars now and deposit them for a fixed term of one year or three years, the interest rate at maturity might have already declined, making it less meaningful to continue depositing US dollars. However, when exchanging back to yuan at that time, you would still have to bear the loss of fees for currency exchange or note exchange.