Xin Hua Wang·2026-01-06 12:21Core Viewpoint - The reduction of 5-year fixed deposit products by multiple commercial banks is a direct consequence of the current low interest rate environment, reflecting a broader trend towards specialized wealth management in the financial market [5][9][15] Group 1: Market Environment - The overall market interest rates have remained low, leading banks to reduce the supply of long-term deposit products, particularly 5-year fixed deposits [6][9] - As of December 2022, the 5-year Loan Prime Rate (LPR) was 4.30%, which dropped to 3.50% by December 2025, indicating a significant decline in interest rates over the years [7] - Many banks have shifted focus to shorter-term deposit products, with 2-year and 3-year options becoming more prevalent [7][8] Group 2: Customer Reactions - Customers have varied responses to the reduction of 5-year fixed deposits; some continue to prefer bank deposits, while others are exploring alternative investment options due to declining interest rates [8][9] - A customer from Shijiazhuang expressed disappointment over the reduction of long-term deposits, indicating a shift to 3-year products as a compromise [8] - Younger customers are increasingly diversifying their investments, opting for gold and other liquid assets instead of traditional fixed deposits [8][9] Group 3: Banking Strategies - Banks are actively compressing long-term deposit offerings to maintain net interest margins, which have been under pressure due to low interest rates [9][10] - Some banks have raised the minimum investment threshold for large-denomination certificates of deposit, reflecting a strategic shift in response to the current funding market [9][10] - Financial institutions are focusing on optimizing their asset-liability structures to stabilize net interest margins and enhance profitability [10][11] Group 4: Wealth Management Trends - The trend towards wealth management is becoming more pronounced, with banks enhancing their service offerings to meet diverse customer needs [13][15] - Banks are increasingly integrating various financial products, such as insurance and investment funds, to provide comprehensive wealth management solutions [15] - The shift from savings to diversified asset allocation is expected to continue, indicating a growing market for wealth management services [14][15]