Group 1 - Recent months have seen a trend of banks, including small and medium-sized banks as well as major state-owned banks, reducing their 5-year fixed deposit and large certificate of deposit products, with small banks leading the way with cuts of up to 80 basis points [1][2] - The current round of deposit rate cuts is primarily a decentralized adjustment by small banks and does not yet reflect a comprehensive reduction led by major state-owned banks [2] - The People's Bank of China (PBOC) is expected to lower interest rates in January to support the 2026 growth target, with indications that deposit rates may decrease before the Loan Prime Rate (LPR) [5][6] Group 2 - As deposit rates decline, some funds are likely to shift from low-yield deposits to equity markets, indicating a potential change in investment behavior [7] - The government is showing unprecedented support for the stock market, with the approval of the first batch of seven dual-innovation artificial intelligence ETFs set to launch on November 28 [8] - The reduction in deposit rates, with current rates at 0.95% for 1-year and 1.05% for 2-year deposits, is expected to encourage residents to invest in the stock market and index funds [10] Group 3 - The dual inflow of resident and institutional funds into the market signifies a significant shift in investment patterns, moving away from traditional bank deposits and real estate towards equity markets [11]

Core Viewpoint - The recent trend of declining deposit rates, particularly among small and medium-sized banks, is expected to lead to a nationwide reduction in deposit rates, influenced by central bank policies aimed at stimulating economic growth [2][4][6]. Group 1: Deposit Rate Changes - Small and medium-sized banks have led the recent reduction in deposit rates, with some banks reducing rates by up to 80 basis points [2]. - For instance, the Tongyu County Mengyin Village Bank has not only lowered rates for 1-year, 2-year, and 3-year deposits but has also eliminated 5-year fixed deposits [3]. - The current reductions in deposit rates are characterized as a decentralized approach among small and medium-sized banks, rather than a comprehensive reduction led by major state-owned banks [4]. Group 2: Central Bank Policies - The central bank is expected to lower interest rates further to achieve the 2026 economic growth target, with a potential LPR (Loan Prime Rate) cut anticipated in January [6]. - The central bank's third-quarter report emphasized the need to strengthen interest rate policy execution and supervision to lower banks' funding costs and promote a decrease in overall financing costs [7]. Group 3: Implications of Lower Deposit Rates - Lower deposit rates are significant not only for reducing banks' funding costs but also for guiding savings into the market [8]. - As deposit rates decline, some funds are likely to shift from low-yield deposits to equity markets, such as stocks [9]. - The government's unprecedented support for the stock market, including the approval of the first batch of seven AI-themed ETFs, indicates a strong commitment to stabilizing the market and promoting technology stocks as key investment assets [10]. Group 4: Investment Trends - The emergence of more ETFs suggests a shift in residents' investment preferences from individual stocks to ETFs, indicating a broader trend in investment behavior [11]. - Currently, the 1-year deposit rate for major state-owned banks has fallen to 0.95%, with the 2-year rate at 1.05%, and further declines are expected [11]. - The dual entry of both resident and institutional funds into the market signifies a significant change in investment patterns, moving away from traditional bank deposits and real estate towards index funds and equity markets [12].