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The first issuance of government-backed savings bonds this year sold out rapidly in Beijing, with the five-year options attracting the most buyers. The surge in demand was fueled by declining deposit rates and a lack of medium- and long-term fixed deposit offerings, prompting investors to seek alternative savings vehicles.
Multiple bank branches reported that these bonds were snapped up within seconds. Investors with a preference for government bonds had not seen a new issue for several months, which contributed to the intense demand, according to staff at a major state-owned bank.
The initial and second tranches of these certificated savings bonds, each totaling up to 15 billion yuan (roughly $2.2 billion), are available for purchase from March 5 through March 19, the finance ministry announced. The first tranche features three-year bonds with a 1.63% coupon rate, while the second tranche offers five-year bonds with a 1.7% coupon.
Unlike digital savings bonds purchased online, these certificated bonds can only be acquired at bank counters. Some buyers queued early in the morning to secure their share, with others bringing stools overnight to ensure they got a spot in line. Most of these early purchasers are seniors, a staff member noted.
As deposit rates continue to decline and banks strive to reduce their liability costs, savings bonds remain a compelling value compared to traditional fixed-term deposits at large state banks. Despite this, middle-aged and elderly investors continue to be the primary purchasers.
This trend reflects both personal financial preferences and the broader environment of falling fixed deposit rates. Many of those buying savings bonds are individuals who typically favor stable savings options like fixed deposits, according to banking insiders.
At major state lenders, the maximum interest rate for a three-year fixed deposit is 1.55%. Some five-year fixed deposits offer just 1.3%, while a few specialized products can yield up to 1.6% for five years. Some joint-stock banks also maintain fixed rates that remain more attractive than savings bonds.
[Note: The original attribution to an editor has been removed.]
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