Xin Lang Cai Jing·2025-06-12 00:48Core Viewpoint - The long-standing high-yield large-denomination certificates of deposit (CDs) have quietly disappeared, with most banks now offering rates below 2% for three-year CDs, marking a significant decline in deposit interest rates across the banking sector [1][2][3]. Summary by Category Current Market Situation - Major state-owned banks have removed five-year large-denomination CDs from their mobile banking apps, and three-year CDs now have rates as low as 1.55% [2][3]. - The highest annualized rates for three-year CDs at state-owned banks are now 1.55%, while some private banks like Xishang Bank and Sushang Bank offer rates as high as 2.3% [1][5][8]. Interest Rate Changes - Recent adjustments have seen the annualized rates for one-year and two-year CDs at major banks drop to 1.2%, with three-year and five-year rates also reduced [3][14]. - The latest round of deposit rate cuts marks the seventh adjustment since September 2022, with rates for various terms reduced by 15 to 25 basis points [14][15]. Investment Alternatives - Financial advisors are recommending alternatives such as savings bonds, which offer stable returns, and savings insurance products, which provide a combination of insurance and savings benefits [9][11]. - The current five-year savings bond has an interest rate of 1.7%, while three-year bonds are at 1.63% [9][11]. Banking Sector Challenges - The banking sector is facing ongoing pressure on net interest margins, leading to a tightening of large-denomination CD offerings as banks seek to manage costs [15][16]. - The net interest margin for banks has decreased to 1.43%, down from 1.54% year-on-year, indicating a challenging environment for profitability [16][17].