As we approach the New Year's Day of 2024, many small and medium-sized banks have raised deposit rates and launched various gift-giving activities to attract more depositors. However, you may not have noticed that from next year, those who hold fixed deposits will need to make some preparations. In this article, we'll take a closer look at the four things you need to do and give you tips to help you better cope with changes in your deposit schedule.
When many people see that banks have raised their deposit rates, they may choose to deposit all their funds in fixed deposits with a maturity of more than 3 years. While this can lock in deposit rates, it also creates liquidity issues. In the event of an unexpected event, such as unemployment or illness, which requires an early withdrawal of the deposit, the fixed deposit will be calculated at the current interest rate, resulting in a significant loss of interest. Therefore, it is recommended that depositors should keep a portion of their cash reserves to ensure sufficient liquidity for the next few years before putting the remaining funds into a 3-year fixed deposit, so that they are less likely to withdraw their deposits early because they need to use the funds.
The importance of securing cash reserves cannot be overstated. Once savers have set aside a portion of their cash reserves, they will have enough cash to cover various living and emergency expenses in the event of an emergency, such as a sudden illness of a family member that requires large medical expenses, or an unexpected interruption of the family's main income**. At the same time, cash reserves can also provide more flexibility and security for future investment and financial planning.
At present, many depositors prefer to deposit their funds in small and medium-sized banks, which have much higher interest rates than state-owned banks. However, this year, a number of village and township banks have declared bankruptcy due to poor management and other reasons. Therefore, even in order to chase higher deposit rates in small and medium-sized banks, we recommend that depositors diversify their investments, especially if they do not have more than 500,000 deposits in a bank.
Diversification is one of the important strategies to reduce risk. Diversifying your money across multiple different financial institutions can reduce the risk of a bank going bankrupt or under-operating. At the same time, you can also take advantage of the different advantages and products offered by different banks, such as the relatively high deposit interest rate of one bank, the better service quality of another bank, and other value-added services. Savers can also consider investing in other areas, such as real estate, ** markets, bond markets, etc., to achieve more asset diversification.
Although some banks will raise their deposit rates at the end of the year, there is still room for bank deposit rates to fall in the long run. Therefore, savers need to be prepared for a long-term decline in deposit rates. If you are a conservative investor, you can choose a longer term deposit to lock in a higher deposit rate and keep some liquidity in your daily life to deal with unexpected needs. And if you can take a certain amount of risk, you can consider diversifying your asset allocation to get higher returns.
For long-term downward deposit rates, savers need to be aware of the balance between risk and return. Fixed deposits with a longer maturity can ensure a higher interest rate, but during this period, savers need to pay attention to market conditions from time to time to adjust their investment strategies. At the same time, investing in other financial products is also an effective option, such as buying treasury bonds, structured deposits, bonds**, etc. In addition, it is also important to understand and learn some knowledge and skills of investment and financial management, so that you can make better decisions when the market changes, in order to pursue higher investment returns.
There is a large bubble in the domestic **, property market and foreign exchange market, which makes the risk of blind investment in the capital market very high. Instead of taking the risk of investing, you can keep your money in the bank for more security. However, many savers lack knowledge and experience in investing. Therefore, savers can learn some knowledge and skills of investment and financial management while waiting for new investment opportunities. Only through continuous learning and expanding their knowledge reserves can savers seize the opportunity and become winners in life after the bursting of the property market bubble.
Learning about financial literacy is an ongoing process. By learning about investment and financial management, savers can better understand market dynamics, master investment skills, and improve their return on investment. In addition, mastering some methods of risk management and asset allocation can better protect and increase the value of your assets. Savers can also pay attention to some authoritative financial experts and institutions, through their experience and advice, understand market dynamics and investment trends, and provide reference and guidance for their own investment decisions.
Starting next year, those who hold fixed deposits need to make four preparations. First, savers should keep a certain amount of cash reserves to ensure ample liquidity for the next few years. Second, diversification can reduce risk and diversify assets by considering multiple investment areas at the same time. Third, savers should be prepared for a long-term decline in deposit rates, choose time deposits with a longer maturity and maintain a certain amount of liquidity. Finally, savers should pay attention to market dynamics and learn financial literacy to make informed investment decisions. With these provisions, savers can better cope with changes in deposit regularity and achieve more robust financial growth.
In a rapidly changing economic environment, people with fixed deposits need to be ready to respond to changes. Therefore, proper asset allocation and continuous learning of investment knowledge are crucial. Only by continuously improving their financial literacy can savers better protect and increase their wealth and become winners of financial freedom.