▲ The Last Blow of High Yuan Interest

Click on the image 👇👇👇👇 to view the interest rates for Yuan fixed deposits

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A month into the Middle East crisis, the world is closely watching the deadline on Monday (April 6) for the U.S. ultimatum to Iran; however, last Friday, the U.S. and Israel launched a surprise attack on Iran’s nuclear facilities, escalating the crisis. With a long holiday approaching, it’s no wonder that Hong Kong banks are generally cautious about Yuan fixed deposits, not raising interest rates despite the quarter-end pressures to improve first-quarter results. Recently, only four small and medium banks have adjusted their interest rates, including China Construction Bank (Asia) increasing short, medium, and long-term rates.

Latest Situation of Yuan Fixed Deposits Before Quarter-End:

※ Interest Rate Increases:

• China Construction Bank (Asia) has raised annual rates by 0.15%, making the 3-month, 6-month, and 1-year rates all 1.3%.

• Dah Sing has increased the 3-month rate by 0.2% to 1.5%.

※ Interest Rate Decreases:

• Fubon has lowered rates by 0.1% across the board, with the current 3-month, 6-month, and 1-year rates at 1.4%.

• AirStar Bank has reduced the 3-month and 4-month rates by 0.1% to 1.2%.

The Yuan exchange rate is under scrutiny; at the end of February, the U.S. and Israel’s attack on Iran triggered a “black swan event,” leading to a surge of safe-haven funds into the U.S. dollar, pushing the dollar index above 100 and putting pressure on non-U.S. currencies, with the onshore rate (CNY) frequently dropping below 6.9. Coupled with the actions of the People’s Bank of China, which announced at the end of February that starting March 2, the foreign exchange risk reserve requirement ratio (RRR) for forward foreign exchange sales would be lowered from 20% to 0%, in hopes of reducing speculation on appreciation.

Citi Expert Liu Jiahao Predicts Onshore Yuan May Test 6.85

Liu Jiahao, head of investment strategy and asset allocation at Citibank, indicated that the dollar against the onshore Yuan may test between 6.8 and 6.85. Currently, the urgency for China to introduce supportive fiscal policies is relatively low, but with the PPI remaining positive and rising, it may prompt the People’s Bank of China to delay rate cuts until the second half of 2026.

Furthermore, reviewing the fixed deposit market in the first quarter, due to the continued loose monetary policy in the mainland, interbank rates are continually hitting new lows, leading to a slower increase in Hong Kong banks’ Yuan fixed deposit rates. However, the most notable event is that Bank of China Hong Kong, as a major Yuan clearing bank, has raised fixed deposit rates across the board for the first time in over a year on March 7, with the highest increase being for the 7-day term, soaring by 0.92% to a new interest rate of 11.8%.

In a Chaotic Market, Seizing the Last Chance for High Interest Rates at 16% for Short Deposits

Unfortunately, this leading Chinese bank’s increase in rates did not spark a competitive response from peers. The market expects that in the second quarter, deposit interest rates are likely to remain under pressure to decrease, as the mainland still needs to inject liquidity to support the property market and the economy.

Currently, six small and medium Hong Kong banks are offering flash fixed deposit rates that will expire tomorrow (March 31), and “interest”-seeking individuals should take advantage of the ongoing offers to lock in special rates. Indeed, many recent high-yield stocks, such as China Mobile, have seen their shares plummet after announcing results, and CNOOC (00883) has cut dividends, causing concern; thus, fixed deposits that guarantee capital and interest are a good option.

Limited-time Special Rates are Primarily Divided into Three Categories:

(1) New Funds:

• Standard Chartered: 1% for 3 months, 1.1% for 6 months, and 1.2% for 1 year; minimum threshold is 10,000 Yuan.

(2) Designated Wealth Management Accounts + New Funds:

• ICBC Asia: 1.38% for 98 days and 188 days; minimum threshold is 500,000 Yuan, and during the promotional period, one must hold a “ICBC Wealth” or “Wealth Management Gold” account to qualify with the new funds deposited at the branch; if the same deposit also activates “Smart Savings,” an additional 0.05% annual interest rate can be enjoyed.

(3) Designated Wealth Management Accounts + Redeemed Funds:

• DBS: 16% for 7 days; must be opened at a branch, and if opened online, the interest rate is 10%. The threshold is an equivalent of 300,000 HKD, requiring “DBS Account,” “DBS Prosperity Wealth,” “DBS Prosperity Private Client,” and “DBS Private Banking” clients, as well as “Cross-Border Wealth Management Connect Clients” (individual clients holding a Cross-Border Wealth Management Connect—Southbound account during the promotional period). The maximum limit for redeemed funds is 8 million HKD.

• Fubon: 12.88% for 7 days and 4.38% for 1 month; minimum threshold is 91,800 Yuan, redeemable through branches or Fubon+ mobile banking services.

• Hang Seng: 12% for 7 days and 3.5% for 1 month; minimum threshold is an equivalent of 10,000 HKD, redeemable through personal e-Banking, personal Mobile App, telephone banking hotline, or branches.

• China Construction Bank (Asia): 6.88% for 3 months; minimum threshold is an equivalent of 1 million HKD, for new “VIP Wealth Management” accounts, the first 20% enjoys 6.88%, while the remaining 80% is at the standard rate.

Chiyu Bank First to Extend the Battle, Deferring 10% Interest Until End of June

In summary, while the attached chart lists Chiyu’s 10% for 7 days and 3% for 1 month as the final interest rates for the first quarter; the latest is that this Chinese bank has just extended the deadline from the end of March to the end of June.

Regarding flash high-interest rates, DBS at 16% for 7 days is crowned “King of High Rates,” with an entry cost equivalent to 300,000 HKD, generating approximately 900 HKD in interest for a short deposit. If calculated based on the deposit limit of 8 million HKD, large clients could pocket about 24,000 HKD, not accounting for the exchange rate spread from HKD to Yuan.

As of today (March 30), the onshore rate is reported at 6.9112, with foreign investors optimistic about the Yuan; JPMorgan and UBS expect it to rise back above 6.7 by the end of the year, while Swiss private bank UBP indicates the Yuan is entering a 10-year bull market.

Yuan Becomes a Safe Haven Amidst War, Showing Resilience Against Decline

Experts’ Predictions for the Yuan:

• OCBC Wing Hang Bank economist Wang Haoting: The bank projects a target price of 6.84 for the Yuan by the second quarter of 2026, with an end-of-year target of 6.8.

• Dah Sing Financial Group Chief Economist and Strategist Wen Jiawei: Anticipates the dollar to Yuan exchange rate will fluctuate between 6.7 and 7.1 this year; also expects that the mainland may only reduce interest rates and reserve requirements once this year, but it may be influenced by the Middle East conflict and oil price fluctuations.

• JPMorgan Private Bank: Predicts 6.7 by the end of the year (range of 6.6 to 6.8).

• HSBC Global Research: Projects the dollar to onshore Yuan exchange rates for the first to fourth quarters of this year to be 6.85, 6.8, 6.78, and 6.75 respectively.

Fuyuan Boldly Seizes Long-Term Rates, Regaining the Top Spot for 1-Year Rates

On the other hand, looking at the fixed deposit rates among large, medium, and small banks, the high-interest ranking for various terms has undergone significant reshuffling. Fuyuan has slightly raised the 1-year rate by 0.05% to 1.55%, narrowly surpassing Ant Bank and OCBC Wing Hang’s 1.5%, with digital banks reclaiming the “top dog” title. Similarly, for the 6-month term, Fubon has reduced to 1.5%, dropping out of the top spot, with only Chuang Hing and Ant Bank remaining as “dual champions.”

Considering the highest rates among small and medium banks for various terms:

7 days: ZA Bank 20%

1 month: ZA 6% (reduced by 0.4% in January)

2 months: Fubon 1.3% (reduced by 0.1% on March 23)

3 months: China Construction Bank (Asia) 6.88% (for the first 20% of deposits), with a 5.88% alternative.

4 months and 5 months: Nanyang Commercial Bank 1.4%

6 months: Chuang Hing (threshold 5,000 Yuan) and Ant Bank (30,000 Yuan) 1.5%

9 months: Nanyang Commercial Bank 1.5%

1 year: Fuyuan 1.55%

2 years: China Merchants Yonglong Bank 1.2% (increased by 0.1% on February 10)

Additionally, the Yuan exchange rate remains tied to key short-term events, such as developments in the Gulf War.

Upcoming Key Events:

• April 6: Trump extends the final deadline for negotiations with Iran by 10 days; the deadline for U.S. and Israeli attacks on Iranian energy facilities is extended to April 6; the original ultimatum was March 28.

• April 9: Anticipating “Peace Day,” Israeli news site Ynet cites Israeli officials stating that the U.S. has set April 9 as the date for ending hostilities with Iran, with expected negotiations in Pakistan.

• May 14: Trump will visit China from May 14 to 15 to meet with Xi Jinping; the U.S.-China summit originally scheduled for late March to early April has been delayed by about six weeks due to the Iranian conflict.

Reviewing the First Quarter, the Most Noteworthy Event was Bank of China Raising Rates Across the Board After Over a Year

On another note, comparing the four major banks, three have taken action since 2026: Hang Seng was the first to raise the 3-month and 6-month rates to 1.3% in January, but unfortunately reduced it by 0.1% to 1.2% on March 2. Fortunately, Bank of China made a rare comprehensive increase in short, medium, and long-term rates on March 7, while Standard Chartered raised the 7-day rate significantly to 11% in February. However, HSBC has yet to respond with a defensive move.

Comparison of fixed deposit rates among the four major banks:

7-Day Annual Rate:

• HSBC 12% (only available for branch or telephone banking accounts), 11% (for current account annual interest rate)

• Hang Seng 12% (for exchanging 10,000 HKD)

• Bank of China Hong Kong 11.8% (increased by 0.92% on March 7)

• Standard Chartered 11% (increased by 1% on February 10)

14-Day Annual Rate:

• Standard Chartered 5.5%

1-Month Annual Rate:

• HSBC, Bank of China, and Hang Seng 3.5%

3-Month Annual Rate:

• Bank of China Hong Kong 1.4% (increased by 0.2% on March 7)

• HSBC 1.3%

• Hang Seng (reduced by 0.1% on March 2) 1.2%

• Standard Chartered 1%

6-Month Annual Rate:

• Bank of China Hong Kong 1.45% (increased by 0.25% on March 7)

• HSBC 1.3%

• Hang Seng (reduced by 0.1% on March 2) 1.2%

• Standard Chartered 1.1%

1-Year Rate:

• Bank of China Hong Kong 1.5% (increased by 0.2% on March 7)

• HSBC 1.3%

• Standard Chartered 1.2%

Ping An Digital Bank Celebrates New Brand with Currency Exchange Offers for New Customers

Lastly, Ping An Digital Bank (formerly known as PAObank) has launched new wealth management services after its rebranding, offering double rewards for new customers who open accounts. From now until June 30, successful account openings for investment will receive a series of benefits. For example, during the first 60 days after a new customer successfully opens an account, each completed currency exchange transaction using foreign exchange bank cost price vouchers will earn them an additional voucher.

The foreign exchange bank cost price vouchers are applicable for currency exchange transactions involving HKD, USD, or Yuan, with minimum transaction amounts of 30 HKD, 5 USD, and 30 Yuan respectively; the maximum transaction amounts are 3.9 million HKD, 500,000 USD, and 3.4 million Yuan respectively.

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