Make Sure Eight "Do Not Equal" Re Financing

From the first product issue in 2004 to date, banks

"Bank financing, savings deposits, expected returns, real gains", the expected yield of financial products is generally shown by the annual yield. If the annual yield of a 3 month product is 5%, the actual yield of the product will be 1.25%. In addition, some products yield does not include tax and tax factors, and the actual yield will be lower than the expected return. Foreign currency products will also have exchange rate risk. For example, if a product reaches the expected maximum yield at maturity, the fall in the level of investment currency will lead to a real return of the product far below the expected maximum yield.

It is difficult for many investors to consider the issue of "guaranteed capital guarantee at maturity".

Some of the guaranteed products can be guaranteed only when they are held until maturity. If they are redeemed in advance, they may be difficult to maintain capital and the principal will suffer a certain loss.

This is because when an investor makes an early redemption, the proceeds of the product are calculated according to the value of the product at that time, rather than the expected maximum yield or capital guarantee clause in the product description.

"Basic assets are rising and product returns are high". Generally, products of such unequal relationships are structured products. The level of earnings of such products depends on the matching of basic assets and payment terms (the calculation method of product returns). The higher the degree of fit is, the higher the yield level of the products is, and vice versa.

Gold prices soared last year, while some of the bank's financial products linked to gold were zero yield, which many investors could not understand.

The terms of financial products linked to gold are mismatched with the price trend of gold, that is, although the price of gold is rising, the terms of payment may be flat or bearish, so there will be no yield.

"Early termination, early redemption". Some bank financial products will set up automatic termination conditions. Once the condition is touched, the product will terminate early. If the underlying assets exceed 80%, the products will terminate automatically, but at this time, we should pay attention to "early termination and early redemption".

Early redemption belongs to subjective initiative and needs to pay a certain amount of fees.

The last three differences are "high (low) risk", high (low) income, oral propaganda, contract agreement, others say good for yourself.