Chinese bank offers 6% return up front for ¥1 million 1-Yr CD

Last week it was the deposit wars, with Chinese banks fighting for deposits as the cash crunch intensified. Now everyone is getting in the act and stepping up the battle. Banks are pushing their staff to get friends and family to purchase financial products. In addition to offering more than 6% and even more than 10% interest (these are major banks, the smaller credit companies are already offering well into the double digits as I noted in More On Yuan Depreciation, China's Great Depression), big banks are also offering cash up front. One advertisement offers 60,000 yuan cash on the spot for customers who purchase a 1-yr 1,000,000 yuan CD, or an upfront payment of 6% interest, plus 33,000, or 3.3% interest at maturity, for a total of 9.3% interest.

Banks have also cut their fees for customers moving cash into the banks, while shutting down their systems to customers trying to move cash out of their accounts. (See: Bank Outages Trigger Cash Worries in China for news of the latter.)

There is a full on scramble for cash in China.

银行多管齐下揽储 100万存一年定期当场可提6万

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