Banks such as SVB and Credit Suisse have had a series of accidents. Hong Kong banks are also rushing to grab US dollar deposits. The 12-month deposit period was as high as 5%, and currently the highest is 4.8%. But at the same time, Hong Kong dollar time deposits showed a downward trend again, so that the U.S. interest rate spread of time deposits suddenly widened to nearly 2%. There are banks with US dollar fixed deposits exceeding 4%, but Hong Kong dollar fixed deposits are as low as more than 2%.
The following three simple tables help you compare the annual interest rates of Hong Kong dollars and U.S. dollars with a 12-month deposit period in nearly 20 banks:
Hong Kong and US deposit and interest ratio
4.8% VS 3.8%
For a 12-month deposit period, the interest rate for deposits in USD is up to 4.8%, provided by Fubon, requiring a new fund of US$30,000, and opening in mobile banking.
In terms of Hong Kong dollars, the 12-month deposit period is up to 3.8%, which is provided by two banks, which can be said to be rich and thrifty. The 3.8% of NCB requires 1 million new funds, and it needs to be opened at a branch for wealth management customers.
It is not listed in the picture above. The 12-month deposit period of virtual silver Huili is also 3.8%. channel.
As the market expects that the U.S. interest rate hike will soon reach its peak, the annual interest rate of long-term deposits is lower than that of lower-term deposits. In terms of US dollars, the 3-month or 6-month deposit period also has 5%, which is higher than the 12-month deposit period.
[Fixed Deposit]The 6-month deposit period is large and the maximum is 3.7%. The higher the interest rate threshold, the higher the large household earns 55,000 yuan
U.S. Dollar Time Deposit – Three 5% options for short-term interest rate hikes (updated in March 2023)
The widest spread
Earn an extra 15,000 yuan by making US dollars on a regular basis
Among the above 18 banks, except for Standard Chartered, the rest of the U.S. dollars have higher interest rates than Hong Kong dollars on a regular basis, with the largest gap reaching 1.9%. For example, Chong Hing Bank’s 12-month Hong Kong dollar deposit interest rate is only 2.45%, but the US dollar deposit interest rate is 4.35%, and the interest rate difference between the two is as high as 1.9%. Assuming that the principal is also 780,000 Hong Kong dollars (about 100,000 U.S. dollars), the annual interest rate in US dollars is equivalent to about 33,900 yuan, and the regular annual interest rate in Hong Kong dollars is about 19,000 yuan. The difference between the two is nearly 15,000 yuan.
Another example is Fubon Bank, with a 12-month deposit period, the US dollar is 1.2% higher than the Hong Kong dollar. Calculated at 500,000 Hong Kong dollars, the actual interest earned has a difference of 6,000 yuan if the exchange cost is not included. Others such as Shangshang, CCB Asia, etc., their US dollar deposit interest is also more than 1% higher than the Hong Kong interest rate.
Pay attention to exchange risk when transferring money to US dollars on a regular basis
Although the Hong Kong dollar is pegged to the U.S. dollar, it is not completely volatile. Under the linked exchange rate system, the U.S. dollar to Hong Kong dollar will fluctuate between 7.75 and 7.85, which means that there is a maximum exchange rate risk of nearly 1.3%.
If you take into account the price difference and handling charges of converting US dollars through banks, if the interest rate difference is only about 1%, it may not be enough to cover the cost. Readers should pay attention to this point. However, if you already have US dollar deposits, you may wish to do more US dollar fixed deposits in the near future, which will definitely earn more interest than Hong Kong dollar fixed deposits.
Date this article was last updated: March 31, 2023
Written by: Liao Yiran
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