Lenders look to attract deposits with goodies

Lenders in China, desperate to attract customers who are finding alternatives for their savings, are turning to giveaways. On offer at one branch in Beijing: An iPhone 6 Plus or a Mercedes-Benz.

Cash rebates, trips abroad, interest rates at the highest premium ever over the official benchmark rate, even free vegetables are among other goodies banks are dangling to get Chinese savers to deposit their yuan in savings accounts. The competition is expensive.

"Chinese banks are hemorrhaging their deposits," says Rainy Yuan, a Shanghai-based analyst at brokerage Masterlink Securities Corp. "There is no fix for this. All the efforts they made to win savers back will only push up the costs, so it's a losing battle to fight."