Overview
The Negotiated Deposit refers to the deposit in negotiated deposit accounts opened by insurance companies with ABC for higher returns on funds. The interest rate and term of deposit is subject to the negotiation between the depositor (the insurance company) and ABC.
Features
It allows for higher returns on funds.
Procedures
1. The headquarters or branch of a Chinese insurance company negotiates with ABC branch or sub-branch for theNegotiated Deposit and then signs the Letter of Intent on the Negotiated Deposit for Insurance Companies which should be submitted to the Head Office of ABC. Then the Head Office of ABC and the headquarters of the insurance company sign the Agreement on the Negotiated Deposit.
2. After the execution of the above Agreement, the branch or sub-branch of ABC opens an account of negotiated deposit for the headquarters or branch of the insurance company to make deposits. Then ABC issues the letter of confirmation on the negotiated deposit account.
3. The term of the negotiated deposit is over five years (excluded) but less than ten years (included). The minimum deposit amount is RMB30 million.
4. The interest rate for a negotiated deposit is subject to the negotiation between the Head Office of ABC and the headquarters of the insurance company. Compound interest will not apply.
5. The method of interest payment is subject to the negotiation between ABC and the depositor at the time of depositing.
· The interest should be paid in a lump sum along with the principal, upon maturity.
· The interest should be paid once a year during the whole term to the designated account
of the insurance company.
6. The deposits should be withdrawn in a lump sum. The letter of confirmation shall be presented and returned to ABC at the time of withdrawal.
· In the case of advance withdrawal, the interest will be calculated based on the interest rate
for demand deposits announced by the PBOC on the date of withdrawal.
· In the case of overdue withdrawal, the interest for the period overdue will be calculated based on the interest rate for demand deposits announced by the PBOC on the date of withdrawal.