Smaller banks offer higher rates
Print Edition
SMALLER banks in Shanghai are offering higher interest rates to lure depositors after the central bank’s latest rate cut, which is expected to benefit home buyers, according to analysts.
City commercial and joint-stock banks have raised their one-year deposit rate above 2.75 percent after the People’s Bank of China cut the benchmark rate to 2.05 percent effective from yesterday, Shanghai Daily found.
The Bank of Nanjing offers the highest rate of 3.15 percent among 27 domestic and foreign banks, while the five largest state-owned banks and the Postal Savings Bank of China are offering one-year rate no higher than 2.55 percent.
The PBOC allows banks to offer deposit rates of up to 50 percent above the benchmark, and individuals with large savings, for example above 50,000 yuan (US$8,064.52), can usually negotiate for higher deposit rates with banks.
Previously, the deposit rate was around 2.75 for large banks and above 3 percent for smaller lenders.
The impact of the rate reduction will likely benefit large borrowers and home loan borrowers the most, according to JP Morgan China chief economist Zhu Haibin.
One of those seen to benefit is Yan Dingfu, who works in Shanghai.
“I’m really grateful for this rate cut. I took an 800,000-yuan mortgage and this rate cut allows me to pay 6,000 yuan less a year. That’s three months’ rent for me,” Yan said.
Home sales in top-tier cities have rebounded in April due to the easing policies, figures from independent real estate monitors show.
“The rate cut will aid the property market’s recovery by reducing the cost for buying homes and stimulating demand,” said Yang Hongxu, vice dean of E-house China R&D Institute, a property consultancy.
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