Core Viewpoint - The report from Rong360 Digital Technology Research Institute indicates a significant decline in bank deposit rates, with medium to long-term rates entering the "1 era," reflecting a broader trend of interest rate cuts aimed at stimulating economic growth and reducing corporate financing costs [1][4]. Group 1: Deposit Rate Trends - In May, the average interest rates for various term deposits showed a downward trend, with the 3-month average rate at 1.004%, 6-month at 1.212%, and 1-year, 2-year, 3-year, and 5-year rates at 1.339%, 1.428%, 1.711%, and 1.573% respectively [3]. - Compared to the previous month, the 3-month rate decreased by 24.3 basis points, while the 5-year rate was notably lower than the 3-year rate by 0.14 percentage points [3]. - This marks the first large-scale interest rate adjustment since 2025, with state-owned banks leading the way in reducing deposit rates, resulting in most 1-year fixed deposit rates falling below 1% [3]. Group 2: Monetary Policy and Economic Context - Analysts suggest that the central bank will continue to implement a moderately loose monetary policy to lower corporate financing costs and stimulate market activity, which may lead to further declines in deposit rates [4]. - The ongoing decline in deposit rates is seen as a strategy to maintain reasonable net interest margins for banks while ensuring the stability of the banking system [4]. Group 3: Impact on Banking Operations - The decline in deposit rates has led to a noticeable drop in the sales volume of fixed deposits, prompting banks to adopt aggressive strategies to attract deposits, including promotional activities [6][7]. - Regulatory bodies have issued warnings against chaotic deposit-raising practices, emphasizing the need for banks to focus on stable growth rather than merely increasing market share [8]. - Analysts highlight that the pressure from various financial products is driving banks to innovate in their customer engagement strategies, aiming to create a comprehensive financial service ecosystem [8].