High fixed deposit interest rate is hard to come by

Over the past few years, the US Federal Reserve raised interest rates multiple times, and banks increased fixed deposit interest rates in order to win over customers, with some rates even surpassing 4%. As a result, many rookie and low-risk investors turned to fixed deposits for high returns.

However, as we enter 2025, the US Federal Reserve has started cutting interest rates, leading banks to lower their fixed deposit rates accordingly. Currently, the one-month fixed deposit rate at many banks has dropped below 1%. For this reason, investors who rely on interest earning have to re-examine interest rate trends and hope to catch the last train of high-interest fixed deposits to extend their returns for a few more months.

One thing is clear: the annual interest rate offered by fixed deposits is constantly changing, and high interests are hard to come by. Even if you manage to catch the last train, it's anyone's guess what the fixed deposit interest rate will be when it's time to renew.

Alternatives to the last hurrah of high-interest fixed deposits

Those who are accustomed to fixed deposits probably realise that enjoying the best interest rates from banks is not always straightforward. In addition to researching and comparing the rates offered by different banks, customers may also have to fulfill certain requirements which may include depositing new funds, being a selected customer, or maintaining a minimum deposit amount. Some banks may even require customers to deposit at least HKD 1 million to enjoy the highest interest rate provided by their fixed deposit plans. For some, particularly those who are new to the workforce, this threshold seems overly high.

After all, it’s important to do your homework before choosing a savings tool. In addition to comparing interest rates, it's also worth considering whether the tool offers any protection. Have you ever thought about options beyond fixed deposits from banks that not only offer stable interest gains, but also life protection with lower entry requirements than most banks? 

Guaranteed returns and life protection in one go

The market is currently teeming with savings plans that offer stable interest rates, rivaling those of fixed deposits from banks and helping you grow your wealth with ease. The main difference between these plans and common fixed deposits is that the former often include life protection benefits, on top of interest returns. If the insured person passes away during the policy term, the plan will provide a death benefit to their family.

You may wonder if savings insurance is as safe and reliable as fixed deposits. To ease your mind, all insurance companies in Hong Kong are strictly regulated by the Insurance Authority. As long as you choose a financially strong and reputable company, you can enjoy both interests and life protection with returns that may surpass those of regular fixed deposits. 

Finally, whether your savings goal is to build a secure home, get married, or prepare for the unexpected, I would encourage you to grow your wealth by taking action early. This will enable you to reap fruitful benefits in the near future and live the life you desire.