The following is an in-depth analysis of savings bonds and fixed deposits, and interprets the differences between the two from seven different perspectives:
1.Issuer & Security
The Ministry of Finance is the issuer of savings bonds, while the issuer of fixed deposits is the bank. The Treasury has the highest credit rating, so savings bonds are generally safer than fixed deposits. However, under China's financial system, banks also enjoy implicit guarantees, so in general, there is no risk of default on savings bonds and fixed deposits.
2.Interest payment method and liquidity
There are two types of savings bonds: book-entry and electronic. Book-entry treasury bonds are repaid with principal and interest in a lump sum after maturity, while electronic treasury bonds are paid once a year and the principal is repaid at maturity. In contrast, electronic savings bonds are more liquid than book-entry savings bonds and term deposits because they can earn interest every year and reinvest the interest.
3.Investment threshold and minimum investment amount
The investment threshold for savings bonds is slightly higher than that of time deposits, with the minimum investment amount of treasury bonds being 100 yuan, while time deposits only need 50 yuan. This indicates that the investment threshold for savings bonds is relatively high.
4.Diversity of investment horizons and options
There are six types of CDs, which are divided into: 3 months, 6 months, 1 year, 2 years, 3 years, and 5 years. After the expiration of the deposit term, the principal and interest can be withdrawn or the original term can be continued. In contrast, the maturity options of savings bonds are more diversified, generally divided into one-year, two-year, three-year, five-year, seven-year, and ten-year tenors.
5.Interest-bearing rules and profitability
When the savings bonds are redeemed in advance, the interest is calculated by the file, and the specific standards are as follows: if the savings bonds have been held for half a year or more but less than two years, the interest will be deducted for 6 months; If the savings treasury bonds have been held for 2 years or more but less than 3 years, 3 months' interest will be deducted; If the savings treasury bonds have been held for 3 years or more but less than 5 years, 2 months' interest will be deducted.
For early withdrawal of fixed deposits, the interest rate is calculated according to the current interest rate listed on the date of withdrawal. Therefore, in the case of early payment, the profitability of savings bonds is relatively high.
6.Handling fees and costs
The early withdrawal of savings bonds requires a certain handling fee of about 1 of the principal amount withdrawn. This may add some costs to a fixed deposit.
7.Investment objectives and target audience
Savings bonds are generally regarded as a relatively stable investment method, suitable for investors who have high requirements for capital security and income stability. On the other hand, fixed deposits are a more conservative investment method, which is suitable for investors who have high requirements for liquidity or want to earn a certain amount of interest.
To sum up, there are significant differences between savings bonds and time deposits in terms of issuers and security, interest payment methods and capital liquidity, investment thresholds and minimum investment amounts, investment terms and diversity of choices, interest calculation rules and profitability, handling fees and costs, and investment objectives and applicable groups. When choosing these two investment methods, investors should consider comprehensively according to their own investment needs and risk tolerance.