【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 rate cuts easing

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HK dollar falls below 7.83, but deposit rates haven’t increased yet. However, soaring oil prices may lead the Fed to slow rate hikes, causing a large-scale slowdown in Hong Kong banks’ rate cuts. Overall, only 5 banks (significantly fewer than 17 last week) lowered HK dollar fixed deposit rates this week, including Hang Seng Bank leading the cuts on Monday; fortunately, on Friday (March 20), Standard Chartered reversed course and extended 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, quarterly earnings season begins, and 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 banks lowering (Hang Seng, Bank of China Hong Kong, Bank of East Asia, Public Bank, and HSBC) and 1 bank raising (China Construction Bank). Three banks both raised and lowered rates (BOC Hong Kong: short-term rate cut, long-term rate hike; Standard Chartered: rate hike then cut; Taixin: rate hike then cut).

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

Entering the third week of March, reversing the two previous weeks’ surge in rate cuts, with over ten banks making moves each week. This week’s top rate includes a large deposit position: Public Finance lowered its 4-month rate by 0.125% to 2.25%, losing its top spot.

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

• Review of the rate king battle among banks:
• 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: Nanshang 2.15%
• 3-month: China Construction Bank (Asia) 6.88% (only for top 20% deposits), also 5.88%
• 4-month: Fubon 2.35% (replacing Public Finance at the top)
• 5-month: Nanshang 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: Dah Sing 2.8%
• 18 months: Dah Sing 2.8%
• 2 years: Dah Sing 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 rate rose to 1.4%; 1-month interbank rate fell for three consecutive days, at 2.02%. The banking system’s total surplus is about HKD 53.7 billion. HK dollar temporarily at 7.8321 to 7.8375, USD drops below 100, at 99.406.

The Fed maintains the federal funds rate at 3.5% to 3.75%. Dot plot indicates 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, US unemployment remained stable partly due to seasonal effects. But the pattern of rising unemployment 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. 97 remains a key support level. If tensions ease within three weeks, the dollar may only rise to 101-102; if conflict persists, the dollar could fall back to 95-96.

Five new stocks in fierce competition, boosting overnight rates

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

• AI computer vision solutions provider Jovi
• 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 the rate cuts on Monday, lowering the 3-month rate by 0.2% to nearly 2%. It temporarily fell to the bottom among the four, but the other three banks did not follow suit. Bank of China Hong Kong still holds steady.

• Comparison of the four major banks’ published rates:
• 7 days: HSBC 7% (qualified new funds, branch or phone banking), 6% (liquidity 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% (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 introduces 8-month 2.4% rate, re-promoting select customers for higher interest

Meanwhile, two digital banks (formerly virtual banks) have announced rates:

• Taixin (AirStar Bank): mixed rate adjustments
• HSBC: slight rate reduction but reintroduces special rates for 6 and 12 months, offering an extra 0.15% and 0.1% respectively for select customers.

Comparison of digital bank short-term and long-term rates:

• 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 customers with new funds), Taixin 2.55%, HSBC (select customers), PAO (existing funds), Fubon and Ant 2.5%, Mox 2.3%, ZhongAn 2.01%, Lihui 2%
• 18 and 24 months: HSBC 2.25%
• 36 and 48 months: Mox 2.3%