Banks in Hong Kong are pushing the time deposit rates for the Hong Kong dollar up to the 5 percent level to attract new customers. (PHOTO PROVIDED TO CHINA DAILY)

HONG KONG – Major Hong Kong banks are offering higher rates amid a hike in the interest rate environment to attract new customers, pushing the time deposit rates for the Hong Kong dollar up to the 5 percent level.

OCBC Wing Hang Bank increased its 12-month Hong Kong dollar fixed deposit rate to 5 percent from 4 percent on Thursday, and extended the promotion period until Nov 12. The minimum deposit is HK$200,000 ($2,548), which means customers will earn HK$10,000 a year in interest.

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This eclipsed Fubon Bank (Hong Kong)’s 4.6 percent time deposit rate to claim the top spot, after Fubon had raised its 12-month US dollar time deposit rate to 5.1 percent last week.

Currently, at least 16 banks offer long-term Hong Kong dollar interest rates of 4% or more for 12 months or longer

OCBC Bank Wing Hang also raised its 3-month Hong Kong dollar time deposit rate to 4 percent. This is more than double the rate it offered in March 2020, when the 3-month Hong Kong dollar time deposit was only 1.74 percent with a minimum deposit of HK$500,000.

Hang Seng Bank has raised the interest rates it offers for 6-month and 12-month Hong Kong dollar fixed deposits to 3.8 percent and 4.2 percent respectively, with a minimum deposit of HK$500,000.

Over the past two days, banks that have raised their interest rates, include Bank of China (Hong Kong), which raised its 12-month Hong Kong dollar time deposit rate to 4 percent, DBS and Bank of Communications (Hong Kong), both of which increased their deposit rates to 4.1 percent. 

In addition, Chiyu Banking Corp raised its 3-month, 6-month and 12-month Hong Kong dollar fixed deposit rates to 3.4 percent, 3.7 percent and 4 percent respectively, with a minimum deposit amount of HK$1 million.

Virtual banks are also raising rates. Fusion Bank, which is owned by ICBC Asia, Tencent and Hong Kong Exchanges and Clearing, raised its 1-year interest rate by 0.23 percent to 4.08 percent, and halved its entrance fee to HK$500,000, which is the highest long-term interest rate offered by a virtual bank. WeLab Bank, a homegrown virtual bank that is licensed by the Hong Kong Monetary Authority, raised its 12-month interest rate to 4.18 percent.

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Currently, at least 16 banks offer long-term Hong Kong dollar interest rates of 4 percent or more for 12 months or longer.

Contact the writer at suzihan@chinadailyhk.com