STANDARD CHARTERED BANK and Wing Lung Bank both issued new deposit products last week in response to a growing demand for higher yield.
The products combine the features of a time deposit with a callable certificate of deposit. Standard Chartered's 'high interest callable deposit' has a minimum deposit amount of HK$100,000 over a two-year period with interest rates of up to 2 per cent per year. The product has two tenures - after the first the bank can opt to extend the deposit or repay the amount invested. Principal is guaranteed and the product has a shorter lifespan than a conventional certificate of deposit. No subscription fees are charged.
Wing Lung's first US dollar CD, in US$10,000 denominations, offers a 3 per cent interest rate for the first year. The bank can exercise a call option before May 2004. If this is not exercised, a rate of 3.15 per cent applies for the next three years. Interest is paid quarterly with a 0.15 per cent subscription fee.