Why is it not recommended to deposit "large certificates of deposit"?Insiders analyze the main reasons!
With the continuous development of the financial market, people's concept of financial management is gradually changing. In order to pursue asset appreciation, deposits have become a common way to manage money. However, for large certificates of deposit, experts say it is not advisable to save. This article will analyze the four reasons why it is not recommended to deposit large certificates of deposit from today's reality for your reference.
The liquidity of large certificates of deposit is poor. Compared to other deposit methods, the minimum initial deposit for large certificates of deposit is higher, usually above 200,000 RMB. When depositors opt for large certificates of deposit, it means that the liquidity of this part of the funds is limited during the deposit period. In this case, if the depositor needs to use the funds during the deposit period, early withdrawal will mean a greater loss. In contrast, other deposit methods, such as time deposits and demand deposits, have better liquidity while maintaining a certain level of return.
The yield on large certificates of deposit is relatively low. Although large certificates of deposit have certain advantages in terms of interest rates compared with other deposit methods, their yields are generally not competitive in the financial market. Especially in the current era of low interest rates, the profitability of large certificates of deposit is limited. For investors, investing funds in other high-yield investment varieties such as ** and wealth management products can obtain higher returns. Therefore, from the perspective of profitability, the advantages of large certificates of deposit are not obvious.
Large certificates of deposit have a longer maturity. Large certificates of deposit usually have longer maturities, such as 1 year, 3 years, and 5 years. This means that savers will need to endure a longer lock-in period when choosing large CDs. During this period, the market environment may change greatly, such as interest rate fluctuations, policy adjustments, etc., which will affect the income of depositors. In contrast, deposit methods such as time deposits and demand deposits have a shorter deposit period, and depositors can adjust their wealth management strategies in a timely manner according to market changes to reduce risks.
Large certificates of deposit (CDs) are subject to high political risk. In China's financial market, the influence of politics on the market cannot be ignored. As a financial product, large certificates of deposit are also subject to political regulation. For example, in recent years, China's regulatory authorities have made several adjustments to the issuance size and interest rate of large-denomination certificates of deposit. In this case, the yield and liquidity of large certificates of deposit will be affected by political factors. Other deposit methods, such as time deposits and demand deposits, are relatively less affected by this policy.
There are four main reasons why experts do not recommend depositing large CDs: low liquidity, lower yields, longer tenors and higher policy risks. However, everyone's financial needs and risk tolerance are different, so the choice of large certificates of deposit should be evaluated based on individual circumstances.
For investors who are looking for stable income and lower risk, large certificates of deposit are a good choice. Especially for investors who have a lot of idle funds and do not need to use funds in the short term, large certificates of deposit can provide certain returns. However, for investors who are looking for high returns and have a certain risk tolerance, large certificates of deposit may not be the best choice. In this case, investors can consider investing their funds in other high-yield, more liquid investment varieties to achieve asset appreciation.
There are four reasons why it is not advisable to deposit large certificates of deposit, as we provide a reference angle. In practice, investors should make appropriate financial decisions based on their own needs and risk tolerance. At the same time, it is also necessary to pay attention to market changes and adjust financial strategies in a timely manner to maintain and increase the value of assets.