Deposit Glossary
Browse common terms such as large certificates of deposit, APR, APY, liquidity, and deposit insurance to understand deposit planning faster.
This glossary collects high-frequency finance terms so you can build the basics first and then jump back into calculators or topic pages with more confidence.
Annualized Rate of Return (Apr)
The annualized rate of return is calculated by converting the current rate of return (daily rate of return, weekly rate of return, monthly rate of return) into the annual rate of return, which is a theoretical rate of return and not the actual rate of return achieved. Often used to compare the income levels of financial products over different maturities.
Read the full glossary entryAnnualized yield (APY)
APY (Annual Percentage Yield) is an annual percentage yield that takes into account the impact of compounding calculations (such as monthly or weekly interest) to more accurately reflect the actual interest income you receive during the year. APY is the most intuitive interest comparison standard when comparing deposit products from different banks.
Read the full glossary entryBank Run
Refers to the phenomenon that a large number of deposit customers lose confidence in the bank's ability to pay and concentrate on withdrawing deposits from the bank in a very short period of time.
Read the full glossary entrycertificate of deposit
Large deposit certificates are RMB-denominated large deposit certificates issued by banking depository financial institutions to non-financial institution investors. It is a general deposit, usually with a higher threshold (from 200,000), but has a higher interest rate than ordinary time deposits and allows for transfers before maturity.
Read the full glossary entryCertificate Transfer
The transfer of a deposit certificate refers to the act of the depositor transferring a large deposit certificate held to another investor before the expiration of the deposit certificate. It allows some large deposit certificates to have better liquidity than ordinary periodicity, and is an important mechanism that must be understood when allocating large amounts of funds.
Read the full glossary entryCompound Interest
Compound interest, commonly known as rollover interest, refers to not only the calculation of interest on the principal, but also the interest generated in advance will be used as a way to calculate interest on the principal again in the subsequent interest calculation cycle.
Read the full glossary entryConsumer Price Index (CPI)
CPI is an important indicator of changes in the price level of consumer goods and services, and is often used to observe the strength of inflation. For savers, the CPI can help determine whether deposit yields are actually outperforming price rises.
Read the full glossary entryDeposit Diversification
Decentralized deposits refer to the arrangement of separating and allocating total funds by bank, maturity or product type to avoid the total principal and interest of a single bank exceeding the guarantee boundary, thereby improving the security of funds and taking into account the liquidity of different maturities.
Read the full glossary entryDeposit Insurance
A financial security system established by the state in the form of legislation. In China, the system provides each depositor with full payment protection of up to 500,000 yuan in total principal and interest of a single bank.
Read the full glossary entryDuration Matching
Term matching refers to arranging the deposit period according to the future use of funds, so that the maturity time of funds corresponds to the time of expenditure as much as possible, and early withdrawal and liquidity mismatch are reduced.
Read the full glossary entryEarly Withdrawal
Early withdrawal refers to the act of withdrawing funds in advance before the maturity of products such as time deposits and large deposit certificates. In most cases, part or all of the funds withdrawn in advance will be recalculated at the current interest rate, resulting in a significant reduction in the high interest income that was originally locked up.
Read the full glossary entryEmergency Fund
The emergency reserve fund is a highly liquid fund reserved for emergency medical treatment, unemployment, temporary household expenses, etc. The core goal is not to pursue the highest yield, but to ensure that it is available at any time.
Read the full glossary entryExecuted Rate
The enforcement interest rate is the actual interest rate actually enjoyed by the depositor. It may differ from the listed interest rate published on the official website or on the counter. It is usually affected by activities, quotas, channels and regional factors.
Read the full glossary entryFed Funds Rate
The federal funds rate is the interbank lending rate target range for overnight unsecured lending between US depository institutions. This rate is set by the Federal Reserve and is one of the most important benchmark rates in global financial markets, directly affecting the direction of the deposit rate and the loan rate of the US dollar.
Read the full glossary entryInflation
Refers to the economic phenomenon in which the purchasing power of money decreases, resulting in a sustained and general increase in the level of prices. In savings and finance, inflation is the “invisible killer” of asset value.
Read the full glossary entryInterest Settlement
The method of interest settlement refers to how the bank confirms, issues or rolls over the interest. There are often different calibres such as one-time interest settlement at maturity, monthly interest settlement, quarterly interest settlement or automatic transfer.
Read the full glossary entryLiquidity
The rate at which an asset is converted to cash without losing value. Cash has the strongest liquidity, while five-year time deposits have relatively weak liquidity.
Read the full glossary entryLoan Market Price Rate (LPR)
The LPR is quoted by 18 quoting banks based on the lending rate of commercial banks to the best quality customers, formed by adding points to the open market operating rate (mainly the MLF rate). While the LPR directly determines the lending rate, it is also an important benchmark for deposit rate pricing.
Read the full glossary entryMaturity Date
The maturity date is the agreed end date of products such as time deposits and large deposit certificates. At the maturity date, savers can choose to withdraw, renew or readjust the term, which is one of the most important time points in the entire deposit planning.
Read the full glossary entryMinimum Deposit
The starting amount is the minimum threshold set by the bank for depositors to deposit funds. Ordinary time deposits usually start at $50, while large certificates of deposit have a higher deposit threshold (usually from $200,000 or $300,000). Funds below the initial deposit amount are not eligible for the corresponding high-interest product.
Read the full glossary entryMedium Term Lending Facility (MLF)
The MLF is a monetary policy tool for central banks to provide a medium-term base currency. Since the MLF interest rate is the anchor of the LPR, it is regarded as the “interest rate wind vane” of the Chinese financial market.
Read the full glossary entryNominal Rate
The nominal interest rate is the interest rate figure directly indicated by the financial product, not deducting the impact of inflation, and does not necessarily reflect the real income level after compounding.
Read the full glossary entrySeven Day Notice Deposit
Seven-day notice deposit is a deposit method that balances a certain liquidity with a slightly higher yield. It is usually necessary to notify the bank in advance before withdrawing. The yield is usually higher than the ordinary current but lower than the medium- and long-term term.
Read the full glossary entryPartial Withdrawal
Partial early withdrawal means that only part of the funds are withdrawn in advance before the maturity of the time deposit, and the remaining part continues to be held in accordance with the original rules. Different banks may have different regulations on whether to support, how to calculate interest, minimum retention amount, etc.
Read the full glossary entryPosted Rate
Listed interest rates are the standard interest rate calibre announced by banks. Actual transactions may also be affected by policies, activity limits, customer levels and deposit thresholds.
Read the full glossary entryPrincipal Protection
Guarantee refers to products that meet the established terms and take principal safety as the first goal, and do not exchange fluctuations in principal for income, but still need to distinguish between specific product terms, liquidity restrictions and protection boundaries.
Read the full glossary entryReal Interest Rate
Real interest rate = nominal interest rate - inflation rate. It reflects the amount of wealth growth that investors actually get after removing the effects of inflation.
Read the full glossary entryReinvestment Risk
Reinvestment risk refers to the risk that after the expiration of the original high interest rate product, the market interest rate has declined, resulting in funds can only be redeployed with lower returns.
Read the full glossary entryAutomatic Rollover
Automatic transfer means that after the deposit expires, if the depositor does not withdraw it, the bank will automatically transfer the principal (and interest) to the time deposit of the same term and type at the interest rate listed on the maturity date. This avoids the risk that the funds will only enjoy low demand interest after maturity due to forgotten withdrawals.
Read the full glossary entryDeposit Reserve Ratio (RRR)
The reserve requirement ratio is the proportion of reserves that commercial banks are required to pay to the central bank. It is not the interest rate that savers receive directly, but it affects the liquidity of the banking system, which indirectly affects the overall pricing environment of deposits and loans.
Read the full glossary entryStructured Deposit
Structured deposits are usually composed of a combination of deposits and financial derivatives structures. The security of principal and the range of returns need to be judged according to specific terms, and cannot be simply equated with ordinary time deposits.
Read the full glossary entryTiered Calculation
An interest calculation method that sets different interest rates between subdivisions based on the length or amount of the deposit. Generally, the longer the storage time, the higher the plus point interest rate in the corresponding interval.
Read the full glossary entryTiered Interest
Filing interest calculation refers to the operation in which the bank calculates interest at the rate of the latest term deposit according to the actual deposit period when the depositor withdraws the term deposit in advance. Note: After 2020, the People's Bank of China stopped the filing of interest on most new bank products and changed to interest at the current interest rate, so the interest loss paid in advance increased significantly.
Read the full glossary entryHow to plan for early withdrawal, education funds, and retirement cash
After learning the terms, continue with hands-on guides for education funds, retirement savings, and early withdrawal trade-offs.
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