1. Structured deposits refer to financial products with certain risks in which investors deposit legally held RMB or foreign currency funds in banks and banks embed financial derivatives (including but not limited to forwards, swaps, options or futures). On the basis of ordinary deposits, investors' income is linked to financial or non-financial objects such as interest rate, exchange rate, stock price, commodity price, credit and index.
2. In fact, structured deposits are not ordinary deposits, and they are also different from bank financing. Structured deposits are embedded with financial derivatives on the basis of deposits, which are linked to fluctuations in interest rates, exchange rates and indexes. Let depositors get higher returns on the basis of taking certain risks.
Although foreign exchange structured deposits have the above advantages, there are inevitably many risks, which can be summarized as follows:
1, interest rate risk
China's dollar deposit interest rate is basically determined according to the US federal benchmark interest rate. When the Federal Reserve raises interest rates, the interest rate of domestic dollar deposits will also rise. In this way, because investors choose structured deposits and give up the right to withdraw in advance, once the interest rate rises, the original high income of investors will shrink, even lower than the ordinary deposit interest rate, which is the interest rate risk faced by foreign exchange structured deposit investors.
2. Exchange rate risk
For different types of foreign exchange structured deposits, investors face different exchange rate risks. In addition to the direct impact of exchange rate on the yield of exchange rate-linked products, investors' principal also faces the market exchange rate risk during the deposit period. When the investment expires, if the foreign currency depreciates relative to the local currency, investors will bear the losses, which is the exchange rate risk faced by foreign exchange structured deposit investors.
3. Liquidity risk
Because foreign exchange structured deposits are locked in a fixed term, investors cannot withdraw in advance within the term. Like time deposits, investors will face the risk of losing better investment opportunities and paying higher opportunity costs during the deposit period, which is the liquidity risk faced by foreign exchange structured deposits investors.