Residents rush to renew deposits on interest rate hike

08:18, December 28, 2010      

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After the hike, many residents are rushing to commercial banks to renew their deposits to get the higher rate on their money. But analysts say residents need to count the time, or their additional earning won't cover the lost.

At an ICBC branch in Shanghai, many customers are lining up to renewal their deposits.

One resident in Shanghai said "I deposited on the 25th. Now I want to renew it."

But analysts warn the additional earnings may be less than the amount they lose by renewing their deposit. For example, the interest of a one year deposit of 10,000 yuan is 25 yuan a year more than under the previous rate. But if the fixed deposit is not yet due, banks will give interest based on the current rate not the fixed one and customers could actually earn less.


After the hike, many residents are rushing to commercial banks to renew
their deposits to get the higher rate on their money.

Analysts suggest citizens choose short period deposits, in case there are further interest rate hikes in the future.

Gong Xiaofeng, Deputy Director of Nanjing Xilu Branch, ICBC Shanghai said "From my perspective, residents should make short term deposits like three months or six months, as their interest rates were raised more than others."

Moreover, analysts say that because the mortgage rate was also raised, residents will have to pay even more to borrow.

Source: CNTV.cn
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