Perhaps in the past, you only knew that calculating costs could help you skillfully manage your finances. However, against the backdrop of an enduring low-interest period and a wealth of financial products, people are becoming increasingly dissatisfied with letting their money sit idle in savings accounts. Therefore, when selecting from the ever-increasing array of financial products, there arises the issue of how to accurately compare and measure returns.
Nowadays, some savers and citizens who have just transitioned from being savers to investors often habitually equate the yields of numerous financial products with deposit interest rates for comparison. In reality, this is inappropriate. When measuring and comparing the returns of financial products, there are quite a few nuances to consider. Only by understanding these nuances can one objectively analyze which investment type is profitable and to what extent.
**Savings Deposits**
To channel residents' savings and encourage consumption, the government has implemented a policy of taxing capital income. Therefore, when calculating savings returns, don't forget to apply an 80% discount on the various term deposit interest rates advertised by banks; after tax deductions, that's the actual return. The formula for calculating returns is: Returns = Post-tax Interest = Principal × Rate × Corresponding Term × (1 - 2%).
Example: A deposit of 10,000 yuan for 1 year, the returns = 10,000 × 2.25% × 80% = 180 yuan; Annual Yield = 180/10,000 = 1.8% or 2.25% × 80% = 1.8%.
**Education Savings**
Since the method of calculating returns is similar, without compound interest and no capital gains tax, education savings, certificate-type government bonds, and trusts are grouped into one category here. It should be noted that their natures are strictly distinct, with differing risk-return characteristics. For instance, the yield rate promoted during the sale of a trust is merely an expectation, not a guarantee. Education savings are a special type of deposit set up by the state to encourage families to reserve funds for education, with limits on deposit amounts and eligibility criteria. Certificate-type government bonds are backed by national credit, while trusts have higher thresholds and are suitable for high-end investors with stronger risk tolerance. The formula for calculating returns: Returns = Investment Principal × Rate (or Expected Yield) × Corresponding Years.
Example: A deposit of 10,000 yuan for a 1-year education savings, returns = 10,000 × 2.25% = 225 yuan; Annual Yield = 225/10,000 = 2.25%.
For a trust subscription of 100,000 yuan currently on offer, with a 2-year term and an estimated annual yield of 4.5%, the expected total returns = 100,000 × 4.5% × 2 = 9,000 yuan.
**RMB Wealth Management Products**
Since these are self-produced and sold by banks, people tend to easily compare RMB wealth management products with deposits. In reality, the yields of RMB wealth management products are also only expected, and banks cannot guarantee them. Investors must be mentally prepared for this. Additionally, when analyzing and comparing the yields promoted by banks, one must strip away any exaggeration, clarify whether fees have been deducted, and determine if it's the pure wealth management yield or a composite yield (some RMB wealth management products require pairing with fixed-term savings). Also, remember to match the yield with the investment term, such as distinguishing between a 3-month yield and an annualized yield for a product with a 3-month term.
Example: A bank is offering a three-year product, promoting an expected annual yield of 3.737%. The customer service representative explains that the customer's funds are divided into two parts, with 40% deposited as fixed-term savings (taxes are deducted according to regulations), and 60% entering a entrusted investment account. Thus, the customer's actual returns are the weighted average of the two parts.
**Book-entry Government Bonds**
Investing in book-entry government bonds allows for mid-term trading to capture price differences (of course, larger price differences mean higher returns) or holding until maturity. If held to maturity, the investor enjoys returns based on the corresponding maturity yield on the purchase date. If not held to maturity, one faces the risk of interest rate changes; for example, if interest rates rise, bond prices will fall.
Example: A government bond issued in 2002 with code 020006, sold at a full price of 92.15 yuan on January 21st, with a maturity yield of 4.328%. This means that if an investor buys at this price on that day and holds until maturity, they will earn an annual return of 4.328%.
**Money Market Funds**
Money market funds often claim "daily interest accrual, monthly compounded interest." When calculating returns, they typically use the "seven-day annualized yield," which averages the total earnings per 10,000 units over the last seven days and then converts it into an annual yield.