Too many deposits will lead to lower interest rates. In the 1990s, the one-year bank deposit interest rate was around 10%. Now it is only 1.5%, and in the long run, the interest rate will continue to rise. Keep going down.

Last year, that is, in 2022, I went to the bank to do business and found that the 3-year fixed deposit interest rate was 3.15% and the 5-year fixed deposit interest rate was only 2.75%. Why was it upside down? Let’s think about it in the future, is it possible for the interest rate to be 2% in 5 years? Is it possible that the interest rate will be 1% in 10 years? Is it possible to have an interest rate of 0% for 15 years? Is it possible that interest rates will be negative after 16 years?

Let’s first take a look at this year’s bank interest rates. They’ve dropped again, haven’t they?

Because bank deposits have soared in the past year!

Affected by the epidemic in recent years, the economy has shown a downward trend. Whether it is small and medium-sized enterprises, the real economy or some large factories, there have been layoffs and closures, and many people have They can't find jobs, so many people don't dare to spend blindly. Nowadays, let alone the elderly, young people are becoming more and more aware of saving money, and everyone prefers stable returns, so more people will choose to deposit their money in banks.

The latest data from the central bank shows that resident deposits will increase by 17.84 trillion yuan in 2022, setting a record high! This is almost double that of 2021. However, personal and business loans have decreased. In the first half of last year, new loans to residents across the country were the lowest in the past 10 years!

I wonder if anyone has noticed that there are not as many bank activities this year as before. Is it because banks do not need to attract deposits? In fact, no, because most people are becoming more and more aware of saving money, and they already have their money in banks, and there is no need for banks to continue to collect deposits.

If a bank accepts deposits but cannot lend them out, doesn’t it mean that it will be a waste of money? Just like a merchant who has purchased a lot of goods but cannot sell them, it is very painful to think about it! !

Deposits are rising and loans are falling. What’s the point of having more deposits? Banks are once again worried about having too much money. So interest rate cuts are inevitable! ! !

In addition, everyone saving money will also affect economic development. Cutting interest rates is also a means to promote consumption and investment.

When the economy overheats, the state will raise interest rates to reduce the flow of funds and cool down the economy. When economic growth slows down, interest rates will be lowered, thereby reducing corporate financing costs and revitalizing the economy.

After all, if people like to save money, they will inevitably reduce consumption and personal investment. This is because their expectations for the future are not optimistic and their risk awareness has increased. The increase in corporate deposits reflects the lack of confidence of profitable companies in the future market. Sluggish consumption and investment may push the macroeconomy into contraction, which is not conducive to sustained economic growth.

You know, in the late 1990s, because people liked to save money and were unwilling to spend, the interest rate was set very low, and interest tax was levied at a tax rate of 20%. This is to hope that you will save money in the bank. Use it for consumption or move it to the stock market.

Finally, the negative interest rates I mentioned earlier are real. There are many countries with negative interest rates in the world, such as Sweden (deposit interest rate -1%), Switzerland (deposit interest rate -0.32%), Hungary (deposit interest rate - 0.15%), Norway (deposit interest rate -0.25%), Eurozone (deposit interest rate -0.4%). In addition, Japan, which is relatively close to us, also has negative interest rates on deposits.

From a national perspective, the implementation of negative deposit interest rates is due to the relatively slow development of the country (China’s development is also slowing down) in order to encourage everyone to consume and invest, which will stimulate the growth of social reproduction, so that Promote employment, increase labor income, and promote overall economic development of society. Therefore, it is beneficial for the country to carry out negative interest rates, which can stimulate the economy. But negative interest rates are not very friendly to savers.

Faced with lower and lower interest rates, what should we do?