At least five HK banks offer time deposit rates above 5pc

At least five banks in Hong Kong are offering promotional time deposit rates above 5 percent following the half-year close, as the city’s de facto central bank stepped into the market three times last week to buy Hong Kong dollars and interbank liquidity continues to shrink.

ZA Bank has extended its referral promotion until August 20, offering new customers up to an effective 20 percent annualized rate on a seven-day Hong Kong dollar time deposit through bonus interest coupons, contingent on maintaining specified account balances with some investment activity.

Fusion Bank continues its limited-time offer of up to 10.88 percent for one-month Hong Kong dollar deposits for new clients using the invitation code “Flash2025” until October 5, with weekly quotas available for shorter-term deposits at lower rates.

China Construction Bank (Asia) is promoting its “e-Account Service” with up to 6.88 percent on three-month time deposits for new qualifying customers until September 30. Existing clients can also earn the same rate by successfully referring new customers who open designated accounts.

The Hong Kong Monetary Authority intervened three times last week to defend the local currency’s peg at the weak side of its trading band, 7.85 to the US dollar. As a result, the aggregate balance in the banking system—a key liquidity indicator—is expected to fall to HK$114.54 billion on Monday.

Market watchers warn that if the aggregate balance dips below HK$100 billion, it could place significant influence on Hong Kong interbank offered rates. The mortgage-linked one-month Hibor rose last Friday to 0.85875 percent, gaining about 3 basis points from the previous week.

HKMA’s liquidity absorption and rising interbank rates are typically viewed as bearish for equities, prompting some cautious investors to shift focus to Hong Kong dollar time deposits despite generally low rates.

STAFF REPORTER