When considering investing money in a fixed deposit to earn interest income, it is important to choose carefully whether to enable the automatic rollover feature. Once the fixed deposit matures, if it is not withdrawn or transferred to a new fixed deposit in time, it may lose interest income due to idle funds. In particular, when automatic rollover is not enabled, interest will be calculated at a lower demand deposit interest rate for funds beyond maturity, which is contrary to the goal of wealth accumulation.
Given that people may not be able to physically visit a bank to process their maturing deposits for various reasons, the auto-rollover feature is therefore favored. This feature ensures that funds are automatically transferred to new fixed deposits upon maturity, continuing to enjoy higher fixed deposit rates, especially for depositors who want to automate asset management and avoid idle funds. In the past three years, the automatic rollover has helped many depositors avoid the loss of idle funds caused by the inability to go to the bank.
However, despite the convenience of automatic rollover, manual rollover is preferred when conditions allow. This is mainly because manual rollover maximizes revenue and provides more flexibility. The new CD rate for automatic rollover is usually based on the listed interest rate on the day of rollover, which is not always optimal.
In contrast, manual rollovers provide depositors with more options and opportunities. Depositors can withdraw funds in person at the bank after the deposit matures and re-deposit to obtain a higher effective annual interest rate. In addition, manual rollover also allows depositors to flexibly adjust their deposit strategies according to market conditions and personal needs, such as changing banks, deposit products, deposit tenors and deposit numbers, etc., to achieve more refined fund management and higher returns.
Under the current downward trend of deposit rates, the strategic advantage of manual rollover is particularly significant. Depositors can continue to deposit part of the funds into fixed deposits to ensure stable income, while investing the rest of the funds in other value-added channels, such as savings treasury bonds, ** regular investment and policy-supported emerging investment models, so as to achieve diversified investment strategies and steady growth of wealth.
In summary, automatic dumping and manual dumping have their own advantages and applicable scenarios. Automatic rollover provides convenience and protection against idle funds, while manual rollover gives depositors greater flexibility and strategic choices. In practice, depositors should weigh the pros and cons according to their personal circumstances and market environment to make the most beneficial choice for wealth accumulation.