【Hong Kong Dollar Fixed Deposits】Hong Kong Dollar 3-Month Fixed Deposits Countdown to Highest 6.88% - Earn Over HK$19,000 Interest in One Quarter

▲ Quarterly earnings approaching, fixed deposit interest rate cuts easing

Click the chart 👇👇👇👇 to see Hong Kong dollar fixed deposit interest rate comparison

▼ Click the image to enlarge

+7

+6

The Hong Kong dollar has fallen below 7.83, but the interbank rates have not risen. However, soaring oil prices may lead the Federal Reserve to slow rate hikes, causing a large contraction in the big wave of bank deposit rate cuts in Hong Kong. Overall, only 5 banks (significantly fewer than 17 last week) lowered HKD fixed deposit rates this week, including Hang Seng leading the cuts on Monday; fortunately, on Friday (March 20), Standard Chartered reversed course and increased short-term rates.

On a positive note, the one-sided “rate hikes” have finally seen a breakthrough, as China Construction Bank (Asia) recently raised rates across the board. Looking ahead to next week, with quarterly earnings season starting, experts expect small banks to continue rate hikes to boost performance.

Summary of the week: 9 Hong Kong banks adjusted fixed deposit rates, with 5 cuts (Hang Seng, Bank of China Hong Kong, Bank of East Asia, Public Bank, and HSBC) and 1 increase (China Construction Bank). Three banks both increased and decreased rates (BOC Hong Kong short-term decreased, long-term increased; Standard Chartered re-increased; Taixin Bank increased then decreased).

China Construction Bank (Asia) 6.88% high rate final call

Entering the third week of March, reversing the two-week surge of the year’s most aggressive rate cuts, over ten Hong Kong banks have made moves each week. This week, there was a notable large deposit at 6.88% from China Construction Bank (Asia), but Public Finance lowered its 4-month rate by 0.125% to 2.25%, losing the top spot.

Meanwhile, China Construction Bank (Asia) still leads with 6.88% for 3 months, based on a HKD 1 million deposit threshold. The top 20% of deposits earn the highest rate, while the remaining 80% earn 2.2%, resulting in a total interest of HKD 7,840 over the period. With a cap of HKD 2.5 million, the quarterly interest is HKD 19,600. Reminder: this ultra-high rate ends at the end of March.

• Review of the big and small bank rate wars:
• 7-day highest rate: Fubon 21% (new customer exclusive)
• 14-day: Fubon 25% (new customer)
• 1-month: PAObank 15% (recommended for new customers)
• 2-month: Nanshan 2.15%
• 3-month: China Construction Bank (Asia) 6.88% (only for top 20% deposits), also 5.88% option
• 4-month: Fubon 2.35% (replacing Public Finance at the top)
• 5-month: Nanshan 2.3%
• Half-year: PAObank 2.75%
• 7-month: Public Finance 2.125%
• 8-month: HSBC 2.4%
• 9-month: Taixin 2.45% (down 0.05% on Wednesday)
• 1-year: Nanyang Bank 2.8%
• 18 months: Nanyang Bank 2.8%
• 2 years: Nanyang Bank 2.8%
• 36 months: Mox 2.3%
• 48 months: Mox 2.3%

Morgan Stanley delays Fed rate cut forecast from June to September

Interbank rates are mixed: overnight rates rose to 1.4%, but 1-month interbank rates fell for three consecutive days, at 2.02%. The banking system’s total surplus is about HKD 53.7 billion. HKD/USD temporarily reports 7.8321 to 7.8375, with the dollar falling below 100, at 99.406.

The Federal Reserve maintains the federal funds rate at 3.5% to 3.75%. Dot plots suggest only one rate cut this year. Morgan Stanley has revised its forecast, delaying the rate cut restart from June to September; however, Citibank maintains a June move.

Citi analyst Liao Jiahao maintains US rate cut forecast of 0.25% in June

Liao Jiahao, head of investment strategy and asset allocation at Citi, said that early in the year, the US unemployment rate remained stable partly due to seasonal effects. But the pattern of rising rates in spring and summer may repeat, leading the Fed to cut rates later this year, similar to 2024 and 2025. Citi analysts continue to expect a total rate cut of 75 basis points this year, with 25 basis points cut in June, July, and September. Risks related to Middle East tensions may push the US dollar index higher, with short-term dollar strength possibly testing 101-102. Key support is at 97. If conflicts end within three weeks, the dollar may only rise to 101-102; if tensions ease, the dollar could quickly fall back to 95-96.

Five new stocks in a fierce battle, boosting overnight rates

Additionally, five IPOs are racing to the quarterly end, raising a total of HKD 5.9 billion:

• AI computer vision solutions provider JOVIAL
• Collaborative robot company Huayuan Robotics
• Silicon carbide epitaxy supplier Han Tiancheng
• Mainland medical device company focusing on medical imaging products and services, Tencent (00700)
• Strategic partner Desi Bio
• Tongrentang’s traditional Chinese medicine healthcare group Tongrentang Medical & Elderly Care

Saudi officials warn oil prices could reach $180

Regarding oil prices, Brent crude rose above $119 per barrel on Thursday. Goldman Sachs predicts that risks remain skewed to the upside until 2027. Saudi oil officials forecast that if supply disruptions continue until the end of April, prices could hit $180. Goldman notes that past major supply shocks have kept prices above $100 long-term. However, if oil supply gradually recovers from April, Brent crude could fall back to the $70 range in Q4.

Hang Seng cuts 3-month annual rate twice this month, totaling a 0.4% reduction

Among the four major banks, Hang Seng led with a 0.2% cut on Monday, bringing the 3-month rate close to 2%. It temporarily fell to the bottom among the four, but the three other banks did not follow suit, and Bank of China Hong Kong still holds off on cuts.

• Comparison of the four major banks’ published rates:
• 7 days: HSBC 7% (for qualified new funds, branch or phone banking), 6% (liquid financial promotion) Standard Chartered 5% (cut 2% on Feb 10) Bank of China Hong Kong, Hang Seng 5%
• 1 month: HSBC 10% (stock reward plan), 3% (for new funds) Hang Seng 3% (launched Jan 2, HKD 1 million threshold), 2.5% (HKD 10,000 threshold) Bank of China 2%
• 3 months: HSBC 2.2% (cut 0.2% on Mar 2) Standard Chartered 2.1% (cut 0.1% on Mar 2) Bank of China 2.1% (cut 0.3% on Feb 4) Hang Seng 2% (cut 0.2% on Mar 16)
• Half-year: HSBC 2% (cut 0.1% on Mar 2) Standard Chartered 1.95% (cut 0.05% on Mar 2) Hang Seng 1.9% (cut 0.2% on Feb 9) Bank of China 1.9% (cut 0.2% on Feb 4)
• 1 year: Standard Chartered 2% (cut 0.2% on Feb 10)

HSBC adds 8-month rate at 2.4%, reintroduces special client rate

Meanwhile, two digital banks (formerly virtual banks) have made moves this week: Taixin Bank (AirStar Bank) with mixed rate adjustments; HSBC slightly reduced rates but reintroduced special rates for 6-month and 1-year clients, with increases of 0.15% and 0.1%, respectively.

• Digital bank short- and long-term rate comparison:
• 7 days: Fubon 21%
• 14 days: Fubon 25% (new customer)
• 1 month: PAObank 15%
• 2 months: Taixin 1.2% (down 0.25% this week)
• 3 months: PAObank 2.65%
• 4 months: Taixin 2% (down 0.05% on Tuesday)
• Half-year: PAObank 2.75%
• 8 months: HSBC 2.4% (new this Wednesday)
• 9 months: Taixin 2.45% (down 0.05% Wednesday)
• 1 year: PAObank 2.75% (new clients with new funds), Taixin 2.55%, HSBC (special clients), PAO (existing funds), Fubon and Ant 2.5%, HSBC 2.4% (general clients), Mox 2.3%, ZhongAn 2.01%, Lihui 2%
• 18 and 24 months: HSBC 2.25%
• 36 and 48 months: Mox 2.3%