Deposits withdrawn before maturity date to retain initial interest rate

Depositors will enjoy an initial high interest rate on their remaining account balance should they conduct a partial withdrawal before the maturity date, starting August 1.

Accordingly, if the customer withdraws part of a term deposit before maturity, only this part of early withdrawal is treated as a non-term deposit with an interest rate as low as an usually no more than 0.1%. The remaining account deposit will still enjoy the original interest rate for the term deposit.

Under existing regulations, customers will receive extremely low interest rates if they withdraw the whole or part of their deposits at banks before the maturity date as the whole deposits are then treated as non-term.

In fact, many depositors must either break their savings accounts and lose almost all interest, or use their deposit books as collateral to acquire loans from banks to avoid losing interest from pre-maturity withdrawal.

This rule has put depositors at a disadvantage and proves "a disaster" for poor people, many of whom rely on saving interest to cover part of their daily living expenses.