【Hong Kong Dollar Fixed Deposit】Hong Kong dollar 1-year fixed deposit with a maximum interest rate of 2.7%, earning 2.7 million HKD. East Asia Digital Bank competes against the market to fight for long-term funds.

			▲ Early April: First Two Days See 8 Hong Kong Banks Cut Savings Rates

Tap the image 👇👇👇👇 to see a Hong Kong-dollar time deposit rate comparison

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Right at the start of April’s first week, only four banks consistently raised Hong Kong-dollar fixed deposit rates (up from three last week). This included on Thursday (April 2) Fusion Bank and AirStar Bank, which bucked the trend by increasing 1-year annualized rates; the new rates for both were 2.7%.

In contrast, this week saw five institutions (down from six last week) cutting but not increasing. For example, looking only at Thursday: there were six banks chasing the interest-rate-cut express lane—Bank of Communications Hong Kong added on Wednesday and cut on Thursday; BOC International and大众银行 cut for two consecutive days; 建行亞洲 cut across the whole range; Fubon and 创興 also reduced rates.

Although, ahead of the long holiday, interbank rates were broadly moving up, over these two days many Hong Kong banks that had already increased also cut again. Looking ahead, with only three trading days next week, experts expect the interest-cutting wave to continue. With Trump’s military actions against Iran still expected to take two to three weeks, the market expects a ceasefire in the Middle East to happen only in May. Businesses in the industry may fear being forced to wait and see. With limited loan demand, banks offering higher deposit rates still have only so many outlets for new lending; some banks even end up “squeezing for deposits and pushing demand” to grab long-term high rates.

In summary, across the whole week, 14 Hong Kong banks adjusted fixed-deposit rates: five banks cut (China Construction Bank 1-week with two consecutive cuts, Fubon, Citibank? Actually 匯立, as well as 创興? and 汇立? and 5: 富邦、集友、创兴、匯立、建行亞洲? plus 匯立 and 集友; keeping as original list: 建行一周兩連減、富邦、集友、創興、匯立), while three banks increased (HSBC? Actually 星展、東亞、富融). The remaining six banks both raised and cut (AirStar resumed rate increases on Thursday; 工银、大新、大众、交银、信银 raised then cut).

China Construction Bank (Asia) 5.88‰ + 6.88‰ very high-yield “step-it-up” ‘come-and-go’ competition

With only four trading days this week, the high-yield leaderboard for five deposit tenors saw major reshuffling: 1 month, 4 months, 1 year, 18 months, and 24 months—all because Ping An Digital Bank’s 1-month offer of 15‰ and Dah Sing’s 1-year, 18-month, and 24-month offers of 2.8‰ expired at the end of March and were not extended. As for 4 months: based on Fubon reducing the 4-month rate by 0.1‰ to 2.35‰ on Thursday, it lost the “top spot” and was beaten by DBS’s 2.4‰.

On a 1-year basis, Fusion Bank and AirStar Bank had raised rates against the tide before the long holiday to 2.7‰, barely edging out Ping An Digital Bank’s 2.65‰, reclaiming the top spot. If the hedging crowd parks one million in deposits for a “safe hold,” they lock in 27k in interest.

• Review: Big vs. small banks’ interest-rate king competition:
• 7 days highest: Fusion Bank 21‰ (for new customers only, just extended to end of May)
• 14 days: Fusion Bank 25‰ (new customers)
• 1 month: HSBC 10‰ (stock incentive scheme)
• 2 months: Nanyang Commercial Bank? Actually 南商 2.15‰
• 3 months: ICBC Asia 6.88‰ (only for the first 20% of deposits), with another 5.88‰ option (just extended to June 30)
• 4 months: DBS 2.4‰ (replaces Fubon for first place)
• 5 months: Nanyang Commercial Bank? 南商 2.3‰
• Half-year: Ping An Digital Bank (formerly PAObank) 2.65‰
• 7 months: Bank of Communications? Actually 大眾財務 2.125‰
• 8 months: WeLab Bank 2.35‰ (cut by 0.05‰ on Thursday)
• 9 months: AirStar 2.6‰ (increased by 0.05‰ on Thursday)
• 1 year: Fusion Bank and AirStar 2.7‰
• 18 months: Fusion Bank 2.7‰
• 2 years: WeLab Bank 2.25‰
• 36 months: Mox 2.3‰
• 48 months: Mox 2.3‰

Citibank expert Liao Jiahao expects U.S. inflation to be 3.6% in Q2　Brent oil seen up to $120

After the month-end and quarter-end, interbank rates rebounded sharply on Wednesday, but before the long holiday, on Thursday the full curve reversed upward again. Overnight rates turned from falling to rising, reaching 2.02‰. 1-month interbank rates ended a three-day losing streak and came in at 1.98‰. The banking system’s total surplus edged up to 53.8 billion, with HKD quoted at 7.8352 to 7.8386. The U.S. dollar continued to fall through the 100 mark, quoting 99.956.

The escalation of hostilities between the U.S. and Iran: on Thursday morning, Trump said he would still launch a ferocious attack on Iran. His remarks of “spreading war instead of bringing peace” sparked market panic. Oil prices surged; Brent crude futures rose 5% to $106.15. New York crude futures jumped to $104.19, up 4%.

Citi Bank’s investment strategy and asset allocation head Liao Jiahao said Brent’s 3-month price forecast is $120, but the 6-to-12-month forecast drops back to $80. For New York crude, the 3-month forecast is $108 and the 6-to-12-month forecast is $74. For U.S. inflation, the first-quarter forecast is expected to rise by 3.3%, Q2 by 3.6%, but Q3 and the end-of-year quarter would ease slightly to 3.1%. As for the U.S. dollar index, the 3-month forecast is 103.29, and the 6-to-12-month forecast is 100.47. The Federal Reserve may cut rates by a total of 75 basis points this year—25 basis points each in June, July, and September.

Hang Seng’s 7-day 5‰ cap date extended again to end of June

Also, looking purely at the four major banks, three of the issuing banks are still holding firm and not moving. However, Hang Seng extended its original 7-day 5‰ offer, which was due to expire at the end of March, postponing it to the end of June.

• Comparing the four major banks’ fixed deposit promo rates:
• 7 days:
  HSBC 7‰ (for eligible customers converting new funds only; branch or telephone wealth management), 6‰ (mobile/wealth-management promotion)
  Standard Chartered 5‰ (reduced by 2‰ on Feb 10)
  Bank of China (Hong Kong) and Hang Seng 5‰
• 1 month:
  HSBC 10‰ (stock incentive scheme), 3‰ (for converting new funds)
  Hang Seng 3‰ (launched Jan 2; minimum HKD 1M), 2.5‰ (minimum HKD 10k)
  Bank of China 2‰
• 3 months:
  HSBC 2.2‰ (reduced by 0.2‰ on Mar 2)
  Standard Chartered 2.1‰ (reduced by 0.1‰ on Mar 2)
  Bank of China 2.1‰ (reduced by 0.3‰ on Feb 4)
  Hang Seng 2‰ (reduced by 0.2‰ on Mar 16)
• Half-year:
  HSBC 2‰ (reduced by 0.1‰ on Mar 2)
  Standard Chartered 1.95‰ (reduced by 0.05‰ on Mar 2)
  Hang Seng 1.9‰ (reduced by 0.2‰ on Feb 9)
  Bank of China 1.9‰ (reduced by 0.2‰ on Feb 4)
• 1 year:
  Standard Chartered 2‰ (reduced by 0.2‰ on Feb 10)

Fusion Bank brings it all together: longer-tenor rates plus adds another 21‰ extension to end of May

On the other side, this week four digital banks (formerly virtual banks) moved. They were: Fusion Bank launched a string of initiatives—raising 1-year tenure to take the “long-term high-rate king” spot, while also extending the 7-day 21‰ bonus to end of May. In contrast, Ping An Digital Bank and WeLab Bank reduced rates, while AirStar Bank cut on Wednesday and then increased on Thursday.

• Digital banks’ long vs. short rate kings comparison:

• 7 days: Fusion Bank 21‰ (new customers only)

• 14 days: Fusion Bank 25‰ (new customers)

• 2 months: AirStar 1.3‰ (increased by 0.05‰ on Thursday)

• 3 months: Ping An Digital Bank 2.55‰ (reduced by 0.1‰ on Monday)

• 4 months: AirStar 2.2‰ (increased by 0.1‰ on Thursday)

• Half-year: Ping An Digital Bank 2.65‰ (reduced by 0.1‰ on Monday)

• 8 months: WeLab Bank 2.35‰ (cut by 0.05‰ on Thursday)

• 9 months: AirStar 2.6‰

• 1 year: Fusion Bank and AirStar 2.7‰, Ping An Digital Bank 2.65‰ (all-new customers with new funds), Ant Bank 2.5‰, WeLab Bank 2.42‰ and Ping An Digital Bank 2.4‰ (existing funds), Mox 2.3‰, ZA Bank 2.01‰, Li Rui 2‰

• 18 months: Fusion Bank 2.7‰

• 24 months: WeLab Bank 2.25‰

• 36 months and 48 months: Mox 2.3‰

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