We’re already seeing ripple effects from the central bank’s policy rate hike last week. Four state-invested banks raised their deposit interest rates from Monday. On Wednesday, Chunghwa Post’s banking system followed suit, raising the interest rate it pays for savings deposits. Following its adjustment, a one-year term CD of NT$1 million will yield an extra NT$1,250 in interest each year. So for savers, the central bank’s rate hike means a modest boost. But homebuyers aren’t smiling, because their mortgages have just gotten more expensive.

Here at the post office, customers wait their turn for service. Chunghwa Post’s banking system is favored by older adults, who see it as a trusted place to save money. Following the central bank’s interest rate hike, the post office has raised rates on its savings accounts.

Lai Chih-chang
Great Home Realty researcher
For an account with NT$1 million in savings, the increase in annual interest will be around NT$1,250. But people who have mortgages, there will be an additional burden.

Chunghwa Post raised its deposit interest rates by a range between 0.115 and 0.13 percentage points. With the adjustment, its one-year term deposit rate is now 1.725%. State-invested banks including Bank of Taiwan, First Bank, Taiwan Cooperative Bank, and Land Bank of Taiwan have also adjusted rates, raising demand deposit and term deposit rates by a range of 0.12 to 0.135 percentage points. One-year term deposit rates now range from 1.725% to 1.755%. But while savers may rejoice, homebuyers are facing steeper payments. A 30-year mortgage of NT$10 million now costs an extra NT$631 a month, or NT$7,572 a year.

Member of public
We do also have a mortgage. When the central bank raises its rates, our interest rates go up, too.

Member of public
There’s inflation and rising electricity prices. Monthly expenses are going up. Say that you have NT$1 million in a bank account. That gets you just NT$1,000 or so in interest. You can spend that in a flash. It’s better to put that money in ETFs, which have higher returns than any bank or the post office.

For savers, the central bank’s surprise rate hike means slightly more bang for their buck. But for mortgage holders, it’s only one more source of financial stress.

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