In recent days, driven by the US Federal Reserve's (Fed) interest rate hikes, US dollar fixed-term deposit rates at foreign-funded banks in mainland China have risen markedly, with several limited-time promotional products offering annualized rates above 4%, attracting many depositors with dollar assets to adjust their deposit allocations.
On September 16, the Fed announced a 25-basis-point increase in the target range for the federal funds rate to 3.75%–4.00%. According to reports, several foreign-funded banks with branches in mainland China, including Bank of East Asia (China), HSBC China, Fubon Hua Yi Bank, and Ta Chong Bank, have set thresholds for new customers and new funds, with promotional rates on 3-month to 1-year US dollar time deposits reaching up to 4.15%. By contrast, US dollar time deposit rates at mainland China's large state-owned commercial banks, joint-stock commercial banks, and city commercial banks are generally below 4%.
Following the Fed's move, the Hong Kong Monetary Authority raised its base rate to 4.25%. US dollar time deposit rates at several banks in Hong Kong have climbed further, with institutions such as ICBC (Asia), China CITIC Bank International, and Fubon Bank offering new-fund products with annual rates above 4%, and some products reaching as high as 4.35%. Rules vary widely among banks regarding minimum deposit amounts and whether new funds are required.
US dollar time deposit rates at several foreign-funded banks in mainland China reach 4%
In early September, Ms. Li from Shanghai finally succumbed to the "temptation" and purchased a one-year US dollar time deposit of US$50,000 at a large state-owned commercial bank, with an annual rate of 3.8%. She felt the rate was still very attractive. At the time, she was uncertain whether the Fed would raise rates. If it did, she thought US dollar time deposit rates might rise further, and her timing might have been a bit early.
After the Fed's rate hike in mid-September, compared with large state-owned commercial banks, joint-stock commercial banks, and city commercial banks, US dollar time deposit rates at several foreign-funded banks rose above 4%. Information published on the WeChat public account "East Asia China Wealth Management" on October 1 showed that from October 1 to October 15, new customers subscribing to US dollar time deposits at Bank of East Asia for the first time could enjoy a new-customer rate on the same day. Among them, a product with a minimum deposit of US$50,000 and a 3-month term had an annual rate of 4.1%.
An article published on the WeChat public account of the Shenzhen branch of Ta Chong Bank on October 8 showed that for the bank's US dollar time deposits with a minimum deposit of US$2,000, the annual rates for 6-month and 12-month products were 4% and 4.1%, respectively. In addition, other foreign-funded banks also launched US dollar time deposit products above 4%. For example, at HSBC China, Premier customers depositing RMB 500,000 or equivalent foreign currency can enjoy preferential US dollar time deposit rates. A staff member at the bank's Shenzhen branch told reporters that as of October 19, for new funds with a minimum deposit of US$1,000, the annual rate on a 3-month US dollar time deposit was 4.1%.
A staff member at the Guangzhou branch of Fubon Hua Yi Bank also told reporters that after the Fed's September rate hike, the bank launched a new round of US dollar time deposit products with greater promotional benefits. As of October 18, for new customers with a minimum deposit of US$10,000, the annual rates on 3-month and 6-month US dollar time deposits were 4.15% and 4.05%, respectively. Account managers at the aforementioned banks also said that most of the promotional annual rates were valid until mid-October, after which rates might be adjusted—either remaining unchanged or decreasing.
Ms. Li told reporters that she had previously lived and worked in the United States and holds a substantial amount of US dollar funds. When she saw that annual rates at foreign-funded banks had reached above 4%, even more attractive than the 3.8% she locked in in early September, she wanted to find another foreign-funded bank to purchase US dollar time deposits. According to her understanding, in July, a certain foreign-funded bank offered a promotional annual rate of 4% on a 1-month product for new funds with a minimum deposit of US$20,000, but at that time she felt the 1-month term was too short and did not deposit. Currently, the latest product from that bank no longer offers a 4% annual rate. Later, she identified another foreign-funded bank, deposited US$20,000 for a half-year term, with an annual rate of 4.05%.
Compared with foreign-funded banks, other mainland commercial banks—even some small and medium-sized banks that previously offered higher US dollar time deposit rates—have not reached a 4% annual rate. During interviews, reporters learned that Bank of Chongqing offered annual rates of 3.7%, 3.8%, and 3.8% for 3-month, 6-month, and 1-year US dollar time deposits, respectively; Chongqing Three Gorges Bank offered 3.7%, 3.65%, and 3.6% for 3-month, 6-month, and 1-year terms, respectively; and Guangdong Huaxing Bank offered rates ranging from 3.25% to 3.65% for terms from 1 month to 1 year. A depositor in Jiangsu told reporters that in September she had arranged a 3-month US dollar time deposit with an annual rate of 3.7%. In October, she negotiated with an account manager at another city commercial bank, who agreed to give her a 3.9% rate, but the minimum deposit required was US$50,000. Although the annual rate did not reach 4%, she decisively withdrew the US dollars she had just deposited in September and moved them to the bank offering the higher rate, arranging a one-year term.
US dollar time deposit rates at multiple Hong Kong banks reach 4%
After the Fed's rate hike, the Hong Kong Monetary Authority followed suit. On September 17, the Hong Kong Monetary Authority issued a statement raising its base rate by 25 basis points to 4.25%. Reporters noted that compared with mainland banks, more banks in Hong Kong have launched US dollar time deposit products above 4%.
Ms. Chen from Guangdong told reporters that during the National Day holiday she traveled to Hong Kong and saw that Chong Hing Bank in Hong Kong offered US dollar time deposit rates above 4%, with 6-month, 9-month, and 12-month new-customer US dollar time deposits all at an annual rate of 4.1%. By comparison, the product Ms. Chen had previously bought at a mainland bank had an annual rate of less than 3%.
Ms. Wang from Hong Kong has a habit of regularly depositing funds with ICBC (Asia) for savings, so she often follows the bank's monthly updated new-fund time deposit promotions. She told reporters that ICBC (Asia)'s US dollar deposits are divided into two tiers based on minimum deposit amount: "US$15,000 or above" and "US$100,000 or above." Regardless of the tier, before October, US dollar time deposit rates were below 4%. After entering October, in the "US$15,000 or above" tier, the annual rates for 98-day, 188-day, and 388-day US dollar deposits were 4%, 4.1%, and 4.2%, respectively; in the "US$100,000 or above" tier, the annual rates for 98-day, 188-day, and 388-day US dollar deposits were 4.05%, 4.15%, and 4.25%, respectively.
Through interviews and by browsing the official websites of major Hong Kong banks, reporters learned that currently, mainstream Hong Kong banks such as HSBC Hong Kong, Bank of China (Hong Kong), Hang Seng Bank, and Standard Chartered Bank have launched preferential US dollar time deposits for new funds, but the highest annual rates have not reached 4%. Nevertheless, many banks still offer similar products with annual rates above 4%, though the conditions vary.
For example, at CCB (Asia), if you use US$100,000 in eligible new funds for a US dollar time deposit, you can enjoy a preferential annual rate of 4%. Fubon Bank has an even higher threshold: eligible new-fund users with a minimum deposit of US$128,000 can enjoy a 3-month time deposit promotion with an annual rate of 4.35%. In addition, China CITIC Bank International has a lower threshold: new-fund users can enjoy a 4% annual rate on either 3-month or 12-month US dollar time deposits, with no minimum deposit requirement, and existing funds also receive the same 4% rate for similar products.
A depositor who has opened multiple Hong Kong bank accounts, including at Hang Seng Bank, China CITIC Bank International, and ZA Bank, told reporters that he initially opened a Chinese-funded bank account just to try it out, but unexpectedly had a very good experience: new funds could be credited on the same day, and the promotional rates on US dollar time deposits were higher than those at foreign-funded banks.
In addition, in Hong Kong, reporters also noted that Dah Sing Bank and OCBC Bank (Hong Kong) offer US dollar time deposit annual rates of 4%. The former offers new customers a maximum US dollar time deposit rate of 4.2%, while the latter offers 6-month and 12-month new-fund US dollar time deposit annual rates of 4.1% and 4.2%, respectively.
Will the Fed raise rates again by the end of the year?
Ms. Li told reporters she is unsure whether the Fed will raise rates again later. If it does, US dollar time deposit rates will continue to rise. On October 7, the Federal Reserve Bank of New York's Center for Microeconomic Data released the September 2026 Survey of Consumer Expectations. The survey results showed that the public's expectations for near-term inflation jumped in September to the highest level in more than three years, while households downgraded their assessments of current and future financial conditions. Along with worsening inflation expectations, households expected prices to rise in all categories tracked by the New York Fed, including gasoline, food, rent, medical care, and college costs.
On October 7, the minutes of the Fed's September monetary policy meeting also showed that participating Fed officials generally expected inflation to remain elevated in the near term and believed that upside inflation risks still exist. Most Fed officials believed that another increase in the benchmark rate before the end of this year "may be appropriate," but the decision would depend on new market information and an assessment of overall risks.
A macro analyst at a Beijing joint-stock commercial bank told reporters that US September nonfarm payroll data showed that the US added only 29,000 nonfarm jobs in September, far below the market expectation of 90,000, indicating the labor market is cooling rapidly. He believes it is important to note that this nonfarm report may slow the pace of Fed rate hikes, but it is unlikely to change the overall direction of its tightening policy, because the September monetary policy meeting minutes released a clear policy signal: at this stage, monetary policy is in a high-rate observation window, not a policy turning point. Compared with downside economic risks, the Fed is more worried about inflation risks and may keep rates high for longer, preferring to tolerate a mild economic slowdown while suppressing inflation.
Sun Wei, a senior researcher at HashKey Group, also told reporters that judging from the latest minutes of the Fed's September policy meeting, the current baseline scenario is that there may be no rate hike in October, but there is still a relatively high probability of one rate hike in December. In Sun Wei's view, on the one hand, current US inflation is not sticky inflation driven by wages and consumption, but rather price increases driven by large-scale investment in oil and artificial intelligence. The weakening trend in the US labor market has not been fundamentally reversed, and this situation does not support the Fed carrying out continuous aggressive rate hikes. On the other hand, high long-end rates have to some extent created a spontaneous tightening effect, further reducing the likelihood that the Fed will continue raising rates in October. Sun Wei also believes that amid a rebound in energy prices, assuming the labor market continues to weaken and long-end rates remain high, the probability of a Fed rate hike in December will also decline accordingly.