One: Carry trade and earn interest difference

For those who want to hold foreign currencies and preserve value without taking too much risk, time deposits are the first choice.

Due to different currencies, interest rates are also different. For example, compared with RMB, for the same one-year term deposit, the interest rates for pounds, Hong Kong dollars, and US dollars are higher, while the interest rates for euros, Swiss francs, and Japanese yen are relatively low. If you hold a foreign currency with a lower interest rate, you can consider exchanging it for a foreign currency with a higher interest rate, and then deposit it to get more interest. This can be said to be the most worry-free and common way of investing.

Take the Japanese yen-Australian dollar arbitrage as an example. The current one-year fixed deposit interest rate for the Japanese yen is 0.01%, while the interest rate for the one-year fixed deposit in the Australian dollar reaches 1.5%. Without considering exchange rate fluctuations, after converting Japanese yen into Australian dollars, the interest income will be 150 times the original amount. However, different banks have different foreign currency deposit interest rates. It is also necessary to compare the foreign currency deposit interest rates of different banks before conducting carry transactions.

Two: Foreign currency financial products to ensure the safety of principal

The income is slightly higher than that of fixed deposits. The more popular ones are the foreign currency financial products of banks. Generally, Chinese and foreign banks have foreign exchange financial products with guaranteed principal and floating returns. As long as it is held to maturity, not only can the safety of the principal be guaranteed, but the expected rate of return is also higher than that of foreign exchange deposits. Therefore, bank foreign exchange financial products are suitable for investors with large amounts, who attach great importance to the safety of principal and who will not use funds for a period of time.

At present, various banks have launched a number of foreign currency financial products, with yields mostly above 5%, which can make up for the shrinkage in income caused by the appreciation of the RMB and create a surplus. However, experts suggest that investors can choose such financial products with shorter maturities to avoid the risks caused by long-term RMB appreciation.

Investors need to note that some commercial banks’ foreign exchange financial products must be held until maturity to ensure that the principal is not lost. For example, China Merchants Bank does not allow early redemption, while HSBC stipulates that customers' early redemption does not guarantee 100% of the principal. There are also financial services provided by foreign banks, including agency investment in foreign funds, bonds and stocks. Although this type of product has a good yield, it does not protect the principal, so investors must have considerable risk tolerance.

Three: Foreign exchange real offer transactions, profit from exchange rate fluctuations

Profiting from the rise and fall of exchange rates through buying and selling between different currencies is also a common method of foreign exchange investment. Investors can use trading software, telephone banking, and counter methods to convert between different currencies such as Hong Kong dollars, Australian dollars, US dollars, euros, Canadian dollars, British pounds, Japanese yen, Singapore dollars, Swiss francs, etc.