Are the risks of interbank certificate of deposit funds high? The risk of interbank certificate of deposit funds is greater than that of money funds but less than that of stock funds. The income level is between money funds and short-term debt funds. It is a relatively recognized alternative to currency funds in the market.
The interbank certificate of deposit fund invests more than 80% of the funds in interbank certificates of deposit, which are passbooks between banks.
Interbank certificates of deposit funds are book-entry time deposit certificates issued by banks and other deposit-taking financial institutions in the inter-bank market. They are short-term financing tools for banks. The term is generally not more than one year, and they have good liquidity and high security.
For example, the person who repays the credit debt is the enterprise, and the person who repays the interbank certificate of deposit is the bank.
Will the interbank certificate of deposit fund lose principal? It does not protect the principal, but the probability of losing principal is very small. It is a medium-low risk fund, because the interbank certificate of deposit fund invests in cash assets, which is very similar to a currency fund.
From the perspective of risk-return ratio, interbank certificate of deposit index funds are higher than money funds and lower than pure debt funds.
Under what circumstances will the interbank certificate of deposit fund lose money? The timing of buying is not good. The yield of the interbank certificate of deposit fund is calculated based on the increase or decrease in the net value. The net value rises most of the time, but there are also times when the net value falls.
If an investor fails to grasp the timing of buying, for example, if an investor buys at a position with a higher net worth and sells at a position with a lower net worth, he or she will lose money.
The popularity of interbank certificate of deposit funds shows that they meet the needs of investors, but of course it does not mean that this type of fund is suitable for everyone.
Interbank certificates of deposit funds are more suitable for investors who have strong demand for security and do not have high requirements on capital liquidity and yield.