The Hongkong and Shanghai Banking Corporation raced with other local lenders and offered a promotion of 3 percent return on the three-month Hong Kong dollar time deposit amid a lower interest rate.
For every HK$50,000 of new funds 3-month time deposit, selected customers will receive the basic interest rate of 2.3 percent plus a HK$90 cash rebate which is equivalent to 0.7 percent, bringing the total return to 3 percent, HSBC said.
The minimum deposit is HK$10,000, and the HK$90 cash rebate is awarded for each HK$50,000 new funds with no upper limit.
For example, a customer who deposits HK$1 million in new funds for a three-month term on October 16 would receive HK$5,797 in interest and HK$1,800 in cash rebate until maturity on January 16 next year, according to HSBC.
This promotive event is available to designated wealth management and individual clients who receive a promotion invitation via short message service, email, or push notification, indicating it's not a premier-exclusive offer.
The campaign runs from October 16 to November 14, and the cash rebate will be sent to clients on or before February 28 next year. Customers can apply this offer via the HSBC HK App or HSBC Online Banking.
Mickey Tang, general Manager and deputy head of retail banking at Dah Sing Bank (2356), said that this move aimed to retain clients' funds and attract them to transfer money to the bank.
As HSBC's promotion puts pressure on other bank rivals, some small and medium-sized banks are expected to raise their deposit rates further, he added.
Regarding the following trend of interest rate, Tang said that the time deposit rate for three months would remain around 3 percent by the year-end, despite the potential US rate cut.
Concurrently, only digital banks offer the lowest entry barrier for three-month time deposit interest rates between 3 to 3.1 percent, with minimum deposits as low as HK$1 or HK$100.
One of the digital banks, PAObank, recently announced a 16 percent interest rate promotion on a one-month HKD time deposit for clients who get a promo code to open a new personal savings account for the first HK$50,000, which will be held until November 30.
In contrast, traditional banks require a minimum deposit of HK$500,000 or HK$1 million for clients to enjoy returns of 3 percent or more, while many lenders require new funds and even offer them exclusively to new customers.
