What Are the Methods of Foreign-Currency Wealth Management?

Foreign currency financial management is a popular investment method nowadays, attracting many people to join it every day. So what are the methods of foreign currency financial management? Let’s introduce them to you below.

1. Foreign currency savings

Foreign currency (Forex) savings are similar to domestic bank savings and also have interest, but the interest rates vary between different currencies and different banks. Like the U.S. dollar, the interest rates on U.S. dollar demand deposits of domestic banks are different, but the difference is not big. Most of them are around the 0.05% interest rate level, and some banks have an interest rate level of 0.1%. The interest rates on short-term U.S. dollar "time deposits", such as 1, 3, and 6-month U.S. dollar deposits, are mostly around 0.2%, 0.3%, and 0.6%. For foreign currencies other than the US dollar, the difference in savings interest rates among major banks is relatively large. When saving in foreign currencies, financial planners at Jia Feng Ruide recommend that you “shop around” to choose a storage institution.

2. Bank’s Forex treasure

The bank's Forex treasure can only buy up, not down. It has no leverage and is a real transaction. Investors exchange deposits in one foreign currency for deposits in another foreign currency according to the Forex buying/selling price announced by the bank, and use the fluctuations in the Forex rate in the international Forex market to convert between different deposit currencies to earn a certain exchange difference. However, since the "spread" of banks' foreign currencies is usually large, it will be more difficult to make money with Forex Bao financial management and the profits will be smaller.

3. Forex margin trading

Forex margin trading can be bought up or down, and it is a virtual trading. Its margin characteristics also have leverage, and the leverage multiple can reach 200 times. Forex margin trading needs to be conducted through a Forex trading brokerage company. Jia Feng Ruide financial planners also remind investors that Forex margin trading is very risky, and the transaction may also be "liquidated". Therefore, for sound financial management, roller coaster Forex margin trading may not be suitable.

4. Forex options

Forex options trading refers to a transaction in which both parties purchase or sell options on whether to buy or sell a certain Forex in the future under agreed conditions and a certain exchange rate within a specified period. The popular view is that it is actually a financial tool used to hedge Forex risks. For ordinary residents who do not hold a particularly large amount of foreign currency, it may not be very suitable to use it as an investment and money-making tool. It is just a tool to hedge and prevent exchange rate risks.

5. Bank’s foreign currency financial products

If you are doing foreign currency investment and financial management, it may be more suitable to configure some banks' foreign currency financial products. The purchase threshold for bank foreign currency financial products is generally equivalent to tens of thousands of yuan, and is divided into capital-guaranteed and non-principal-guaranteed types. The expected return of non-principal-guaranteed products is higher than that of capital-guaranteed products. The expected annual returns of these two types of foreign currency financial products are around 0.3% to 4%. The currencies generally involved include US dollars, euros, Japanese yen, Australian dollars, New Zealand dollars, Hong Kong dollars, British pounds, etc. The investment period ranges from 3 months to 1 year. Generally speaking, the income from foreign currency financial products is still higher than the income from foreign currency savings. The comparison in nature is similar to the comparison between the income from allocating RMB financial products and the income from just making RMB savings.