Hong Kong bank offers 0.001 percent interest rate on deposits

May 21st, 2009 - 11:53 am ICT by IANS  

Hong Kong, May 21 (DPA) Hong Kong’s leading bank, HSBC Holdings, Thursday was offering interest rates so low that customers would need to save $250,000 for a year to earn enough interest to buy a cup of coffee.
A record low interest rate of 0.001 percent was being offered by HSBC, which has 4.2 million customers in the city of seven million, because of what it described as rock-bottom interbank rates.

The rate meant that a saver would need to deposit two million Hong Kong dollars ($258,000) for a year to get enough interest to buy a cup of coffee costing 20 Hong Kong dollars.

A saver with 100,000 Hong Kong dollars would have to keep the money in the bank for around 20 years to earn enough interest to buy the same cup of coffee under the new interest rate.

Despite the cut in rates for savers, the prime rate for loans from HSBC remained unchanged at 5 percent.

The city’s other main banks - Hang Seng Bank Ltd, Bank of East Asia Ltd, Standard Chartered and Bank of China - all have deposit rates of 0.01 percent.

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