Sou Hu Cai Jing·2025-05-20 01:18Core Viewpoint - The recent interest rate cuts by China Construction Bank and China Merchants Bank signify a broader trend in the banking sector, with one-year deposit rates falling below 1%, indicating diminishing returns for depositors [1][3]. Summary by Sections Interest Rate Adjustments - Both banks have reduced their savings account interest rates to 0.05%, resulting in a mere 50 yuan interest for a one-year deposit of 1 million yuan [3]. - The three-month to two-year fixed deposit rates have been cut by 15 basis points, while three-year and five-year rates have decreased by 25 basis points, with five-year rates now at 1.3% [3]. - A notable inversion in rates has emerged, where the three-year fixed deposit rate (1.9%) is higher than the five-year rate (1.55%) at China Construction Bank [3]. Market Trends - Over 20 banks have followed suit in reducing interest rates since April, leading to a widespread entry into the "1% era" for deposit rates [3]. - The low-interest environment is prompting a shift in consumer behavior, with increased inquiries into alternative investment products such as bank wealth management, money market funds, and gold [4]. Impacts on Consumers - The reduction in interest income is significant; for example, a 100,000 yuan deposit now yields 950 yuan annually, down from 1,100 yuan, equating to a loss of 150 yuan [4]. - The attractiveness of traditional savings accounts is declining, pushing consumers to diversify their investments and adopt a more proactive approach to wealth management [4]. Strategic Recommendations - Consumers are advised to compare rates across banks to find higher-yield options, particularly among smaller and private banks, which may offer rates significantly above those of major banks [5]. - A suggested strategy is to implement a "laddering" approach to deposits, spreading funds across different term lengths to optimize interest earnings while maintaining liquidity [5]. - Diversifying into various financial products is recommended, including government bonds, index funds, and insurance products, to mitigate the effects of low interest rates and potential inflation [6][7].