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Dec. 21 (NBD) – Banks in China are gearing up to lure depositors with various measures including gifts and higher interest rates as the year-end performance appraisal draws near.

NBD visited a number of banks and found that gifts ranging from corn oil to juicers are displayed in the banks, well organized and prepared.

NBD noticed that some financial advisors would add customers to WeChat and later send them invitations to a variety of events and group buying of financial products.

One financial advisor invited NBD to attend a mini class on knowledge about gold jewelry, mentioning that the bank would offer delicious fruits and dim sum for attendees, as well as luggage suitcases for those who deposit 5,000 yuan (726.5 U.S. dollars) in the bank.

Apart from gifts, a rather conventional trick, banks are also devising financial products with attractive interest rates.

One bank set interest rates 47 percent higher than the central bank's benchmark interest rate for a certificate of deposit of 200,000 yuan (29,059.2 U.S. dollars) and above, 48 percent higher for 500,000 yuan (72,648.0 U.S. dollars) and above, and 52 higher for 1 million yuan (145,296.0 U.S. dollars) and above.

Compared with the fixed term deposit, the certificate of deposit usually has a higher threshold, at least 200,000 yuan (29,059.2 U.S. dollars) for personal investors. NBD noticed that it is not uncommon for banks to raise interest rates for certificates of deposits 50 percent higher than the central bank benchmark.

A foreign bank recommended to NBD a structured deposit that offers higher interest rate exclusively for new depositors at 4.8 percent, 0.2 percentage point higher than the current rate.

Structured deposits, which can bring higher return with certain level of risk, became popular among banks to attract depositors in the first half of this year. The interest rate could fluctuate, hence possibly different interest rate when depositors withdraw.

Rate adjustment occurs not only at specific time, but also at different locations. Some banks introduce products targeting specifically four first-tier cities, namely Beijing, Shanghai, Guangzhou and Shenzhen.

Competition in first-tier cities is very fierce, and products without higher interest rates have no competitive strength whatsoever, an employee at a state-owned bank told NBD.

A financial advisor from another major state-owned bank recommended to NBD a time deposit, the interest rates of which for deposits higher than 50,000 yuan (7,264.8 U.S. dollars) for periods ranging from 3 months to 3 years are 50 percent higher than central bank's benchmark interest rate, and the interest rate for five-year time deposit is set at a high level of 4.875 percent. 

When inquired by NBD whether the rates apply nationally, the financial advisor replied that they are applicable in only certain cities.

Foreign banks are touting their time deposits of U.S. dollars and Hong Kong dollars, which offers higher interest rates than Chinese banks, according to a financial advisor from one foreign bank. 

Many banks set their interest rates for U.S. dollar time deposit at 2 percent, but the bank he serves can offer 3.5 percent, said the financial advisor.

Email: limenglin@nbd.com.cn