China's Structured Deposits Offer Higher Yields

Multiple Chinese banks have introduced structured deposit products linked to gold and currency since the beginning of 2026. For ordinary investors with limited capital, structured deposits are recommended as part of an asset allocation strategy. Some structured deposits include a cooling-off period or can be transferred. These financial instruments combine elements of traditional deposits with derivatives, aiming to provide potentially higher returns. While generally illiquid and complex due to embedded derivatives, some banks allow early withdrawal with potential losses. The terms of the bank's agreement dictate whether principal can be partially recovered before maturity. If a six-month structured deposit is purchased, and funds are needed in the third month, it may be possible to withdraw early by incurring fees, paying commissions, or receiving only monetary interest. Structured deposits in 24 Chinese provinces allow for early withdrawal or cancellation, but not all banks offer this cooling-off period. In 24 provinces, investors can reverse or cancel structured deposit purchases, providing a window for reconsideration. Structured deposit products linked to specific stocks or indices, such as the CSI 300, offer higher potential returns. These products can be categorized by their underlying assets, including those linked to credit events. Another classification is by return structure, such as principal-protected floating-yield products where the principal is guaranteed but the yield fluctuates.