Alibaba’s Yu’e Bao announced on May 14th that the monetary fund is going to lower its daily T+0 (same day) withdrawal limit (in Chinese) from RMB 50,000 ($7,882) to RMB 10,000 since June 6. This means that depositors who want to transfer money to their bank accounts can only receive up to RMB 10,000 worth of assets on the same day.
The T+1 (day after) withdrawal and payment terms will not be affected, the announcement added. Yu’e Bao’s same day withdrawal service is a value-added service that allows users to cash in their assets quickly. A representative from the fund told local media that the current adjustment only affects the speed of cashing in. There is no minimum withdrawal amount, and customers still can withdraw their cash anytime.
The adjustment is a joint decision of the three fund companies on the platform, “It reflects Yu’e Bao’s operation rule, which is small sum and decentralized asset management,” a representative from the company told local media. Yu’e Bao’s average asset amount is around RMB 3,000, so most of the users won’t be affected, the report pointed out.
Alipay began offering Yu’e Bao (余额宝, “leftover treasure”) in June 2013. Managed by Tianhong Asset Management Co., the monetary fund become a quick hit in China by helping individuals who do not have professional financial knowledges to manage their assets wisely. By collecting deposits from a large number of individuals, Yu’e Bao accumulates huge sums of money, and is able to negotiate for a far better interest rate with big banks.
Within five years, Yu’e Bao has become the world’s largest money market fund with assets of some RMB 1.58 trillion (US$233 billion) as of the end of 2017.