The bank also indicates the risk level of this financial product in the financial product specification, which is an important basis for judging the risk of the bank's financial product. The risk level is generally set according to the investment scope, risk return characteristics, liquidity and other factors of the financial products. The first level is the lowest, and the risk increases from the first level to the fifth level.
Level 1 and Level 2: The investment scope is basically the same, mainly including inter-bank market, exchange market bonds, funds lending, trust plans and other financial assets. Level I is generally regarded as our common principal guaranteed income products or principal guaranteed floating income products. The proportion of investment in low-risk parts is higher, and there are usually principal guaranteed clauses.
Level 3: In addition to investing in low volatility financial products such as bonds and interbank deposits, this level of products can also invest in high volatility financial products such as stocks, commodities and foreign exchange. In principle, the investment proportion of the latter should not exceed 30%. This level does not guarantee the repayment of the principal, and there is a certain principal risk. The principal guarantee ratio of structural products is generally above 90%, and the income fluctuates and fluctuates.
Level 4: The proportion of products of this level linked to high volatility financial products such as stocks, gold and foreign exchange can exceed 30%. Principal repayment is not guaranteed. The principal risk is large, and the income fluctuates and fluctuates greatly. The investment is more vulnerable to market fluctuations, changes in policies and regulations and other risk factors, and the possibility of loss is high.
Level 5: The products of this level can be fully invested in various highly volatile financial products such as stocks, foreign exchange and gold, and can be invested in the way of leverage amplification such as derivative trading and layering. The principal risk is great, and the income fluctuates and fluctuates greatly. The investment is more vulnerable to market fluctuations, changes in policies and regulations and other risk factors. Of course, the corresponding expected income will also be high.
Judging the risk level of bank financial products from the terms and conditions of bank financial products
We can also judge the risk level from the term of bank financial products. According to the term, financial products can be divided into ultra short-term products, short-term products, medium-term products, long-term products and open products. In general, the shorter the term, the smaller the liquidity risk, the lower the investment risk. The longer the term, the greater the liquidity risk, and the greater the investment risk.
We can also judge the risk level from the specific terms of the bank's financial products. Many financial products have additional terms, which may be that the bank has the right to early termination, or the bank has the currency option to pay the principal and interest. The risk brought by the additional terms is entirely borne by the customer, so when purchasing, the bank staff should be consulted in detail about the meaning of the additional terms of the product and the possible risks.
Conclusion
Investors need to remember that high returns must be accompanied by high risks, but high risks may not ultimately lead to high returns. Investors must also follow this rule when choosing financial products of banks. They should not only see the benefits described in the product, but also ignore the corresponding risks.
