Group 1 - The core issue in the banking sector in 2025 is the unexpected changes in the deposit market, leading to four peculiar phenomena for depositors [2] - The issuance of large-denomination certificates of deposit (CDs) has significantly decreased, with the interest rate for a 3-year CD dropping from 1.80% at the beginning of the year to 1.55% [3] - There is an unusual inversion in deposit rates, where some banks offer a 3-year fixed deposit rate of 1.55% while the 5-year rate is only 1.50% [6] Group 2 - There is a widening gap in deposit rates between large state-owned banks and smaller banks, with state-owned banks offering a 3-year deposit rate of 1.35% compared to 1.65%-1.75% from smaller banks [7] - Bank staff are increasingly promoting wealth management products, which offer higher annual returns of 2%-2.2% compared to traditional fixed deposit rates [10] Group 3 - The narrowing net interest margin for banks, which was 1.43% at the end of Q1 2025, has led to reduced issuance of large-denomination CDs and the inversion of deposit rates [12] - Banks are pushing wealth management products as a strategy to compensate for declining net interest income, as they seek to maintain profitability [12]

Group 1 - The core viewpoint is that domestic residents are increasingly inclined to save money, with a record increase of 10.77 trillion yuan in deposits in the first half of 2025, driven by concerns over unemployment and future expenses [1] - The decline in deposit interest rates is a significant trend, with the one-year deposit rate dropping from 2.25% to 1.35%, resulting in a decrease of 4,500 yuan in annual interest income for a deposit of 500,000 yuan [5] - The phenomenon of inverted deposit rates is observed, where the three-year deposit rate is higher than the five-year rate, indicating a shift in consumer preferences [8] Group 2 - The number of bank bankruptcies and dissolutions is increasing, with 105 banks approved for dissolution in 2024, raising concerns about the safety of deposits [10] - To mitigate risks associated with bank deposits, it is recommended to lock in interest rates by purchasing large-denomination certificates of deposit, which offer higher rates and transferability [11] - It is crucial for depositors to check if their bank has a "deposit insurance mark," as over 4,000 out of 4,600 banks in China participate in deposit insurance, ensuring full compensation for deposits up to 500,000 yuan in case of bank failure [14]

Core Viewpoint - The article discusses the ongoing decline in deposit interest rates in China, highlighting the inversion of interest rates between different deposit terms and the implications for banks' funding strategies [4][5][8]. Deposit Rate Trends - As of September 2025, the average interest rates for various deposit terms are as follows: 3-month at 0.944%, 6-month at 1.147%, 1-year at 1.277%, 2-year at 1.367%, 3-year at 1.688%, and 5-year at 1.519% [6][8]. - The rates have shown a downward trend, with the 3-year rate being higher than the 5-year rate, indicating a persistent inversion in the interest rates [5][9]. Market Reactions and Expectations - The decline in deposit rates is anticipated by the market, primarily due to the continuous pressure on net interest margins, which have decreased from 1.52% at the end of last year to 1.42% by the end of the second quarter of this year [8][9]. - Analysts suggest that banks are likely to continue adjusting deposit rates downward to optimize their funding structures and manage the costs associated with long-term deposits [10]. Large Denomination Certificates of Deposit (CDs) - The interest rate advantage of large denomination CDs is diminishing, with average rates for various terms in September 2025 being: 3-month at 1.134%, 6-month at 1.318%, 1-year at 1.394%, 2-year at 1.356%, 3-year at 1.729%, and 5-year at 1.610% [12]. - The rates for one-year and longer-term large denomination CDs are becoming comparable to regular deposit rates, indicating a narrowing of the interest rate spread [12]. Structural Deposit Products - The average term for structured deposits has increased to 106 days, with an average expected middle yield of 1.59% and an expected maximum yield of 2.09% [13]. - Different types of banks show varying trends in structured deposit yields, with state-owned banks offering a higher average expected maximum yield compared to joint-stock banks [13][14]. Conclusion - The overall trend indicates a continued downward pressure on deposit rates, with banks likely to maintain a strategy of encouraging short-term deposits over long-term ones to manage their funding costs effectively [10][12].

Core Viewpoint - Recent adjustments in deposit rates by several small and medium-sized banks indicate a proactive response to the pressure on the liability side, reflecting a consensus expectation of declining interest rates [1][3]. Group 1: Deposit Rate Adjustments - Many banks have lowered deposit rates across various terms, with specific examples including Dalian Lushunkou Mengyin Village Bank's new rates of 0.15% for demand deposits and 1.15% to 1.9% for fixed-term deposits [2]. - The trend of lowering deposit rates has been observed since October, with banks like Fujian Huatuo Bank and Shanghai Huarui Bank making multiple adjustments within the year [2]. - The phenomenon of "inverted" deposit rates, where short-term rates exceed long-term rates, has emerged, indicating banks' expectations of further rate declines [4]. Group 2: Reasons for Rate Adjustments - The continuous narrowing of net interest margins has compelled banks to reduce deposit rates to alleviate cost pressures on the liability side [3]. - The expectation of further declines in interest rates has led banks to adjust long-term deposit rates preemptively to avoid locking in high-cost liabilities [3][4]. Group 3: Strategic Responses - Banks are advised to enhance strategic management by integrating local advantages and innovating their organizational structures [5]. - There is a focus on refining asset-liability management, expanding low-cost demand deposits, and increasing non-interest income through wealth management and other intermediary services [6]. - The current interest rate adjustments are seen as a necessary adaptation for banks to balance cost control and strategic transformation for sustainable development [6].

Core Viewpoint - Recent adjustments in deposit rates by several small and medium-sized banks indicate a proactive response to the pressure on the liability side, reflecting a consensus expectation of declining interest rates [1][3]. Group 1: Deposit Rate Adjustments - Many banks have lowered deposit rates across various terms, with specific rates such as 0.15% for demand deposits and 1.15% to 1.9% for fixed deposits of different maturities [2]. - The trend of lowering deposit rates is observed among multiple banks, including Fujian Huatuo Bank and Shanghai Huarui Bank, with the latter having made several adjustments within the year [2]. - The adjustments are primarily driven by the need to manage funding costs and maintain net interest margins amid a narrowing interest spread [3]. Group 2: Interest Rate Inversion - Some banks are experiencing an inversion in deposit rates, where longer-term rates are lower than shorter-term rates, indicating a cautious approach to long-term liabilities [4]. - For instance, Dalian Lushunkou Mengyin Village Bank has a five-year deposit rate of 1.85%, which is lower than the three-year rate of 1.9% [4]. - This inversion reflects banks' expectations of further declines in interest rates, prompting them to avoid locking in high-cost long-term liabilities [4]. Group 3: Strategic Responses - Banks are advised to enhance their strategic management and innovate by integrating local advantages and focusing on regional market research [5]. - Recommendations include refining asset-liability management, expanding low-cost demand deposits, and increasing non-interest income through wealth management services [5][6]. - The current interest rate adjustments are seen as a necessary adaptation for banks to balance cost control and strategic transformation for sustainable development [6].

Core Viewpoint - The recent trend of interest rate cuts among small banks in China indicates a shift towards lower deposit rates, with expectations of further reductions by the end of the year due to central bank policies aimed at alleviating net interest margin pressures [2][6][7]. Group 1: Interest Rate Cuts - Multiple small banks have announced reductions in deposit rates, with changes primarily affecting fixed-term deposits, showing declines between 15 to 80 basis points [3][4]. - Jiangsu Sushang Bank's three-year deposit rate is currently at 2.2%, while two-year rates are at 2.1%, reflecting a broader trend of rates entering the "1%" era [2][4]. - Zhejiang Pingyang Pudong Village Bank adjusted its fixed deposit rates across various terms, with three-year and five-year rates dropping by 80 basis points [3][4]. Group 2: Rate Inversion Phenomenon - Some banks are experiencing a "rate inversion" where longer-term deposit rates are lower than shorter-term rates, such as Shanghai Huari Bank's three-year rate of 2.15% being higher than its five-year rate of 2.1% [4][5]. - This inversion is attributed to market expectations of future rate declines and banks' debt structures aiming to increase short-term deposits [4][5]. Group 3: Future Expectations - Analysts predict that the central bank may implement another round of interest rate cuts and reserve requirement ratio reductions by the end of the year, which could lead to further declines in deposit rates [6][7]. - The current stability of the Loan Prime Rate (LPR) has lasted for five months, but there is potential for adjustments in response to external monetary policy trends and domestic economic conditions [7][8].

Core Viewpoint - Recent adjustments in deposit interest rates by several small and medium-sized banks indicate a trend towards lowering rates, particularly for long-term deposits, to optimize liability structures and manage funding costs amid a declining interest rate environment [1][5][6] Group 1: Deposit Rate Adjustments - Suzhou Bank plans to lower its three-year deposit rate by 10 basis points to 2.1% starting October 22, with new customers still eligible for a 2.2% rate [1][2] - Other regional banks, such as Pingyang Pudong Development Village Bank and Fujian Huato Bank, have also announced significant reductions in deposit rates, with some long-term rates dropping by as much as 80 basis points [2][3] - The frequency of rate adjustments has increased, with some banks like Huixian Zhujiang Village Bank making multiple changes within a short period [3] Group 2: Interest Rate Inversion - A notable phenomenon of interest rate inversion is emerging, where short-term deposit rates exceed long-term rates across various banking institutions [4] - For instance, China Construction Bank offers a three-year deposit rate of 1.55%, while the five-year rate is lower at 1.3% [4] - This inversion is prevalent among state-owned banks, joint-stock banks, and rural commercial banks, indicating a broader trend in the banking sector [4] Group 3: Factors Influencing Rate Changes - Industry experts attribute the inversion of deposit rates to expectations of further interest rate declines and the need for banks to adjust their liability structures [5][6] - The pressure on the liability side is prompting banks to lower long-term deposit rates to reduce funding costs and improve their financial stability [5] - Analysts predict that the central bank may implement further interest rate cuts, which could compel banks to continue lowering deposit rates to manage their interest margins [6]

Core Viewpoint - Several banks in China are reducing deposit interest rates, with a notable example being Suzhou Bank, which plans to lower its three-year deposit rate from 2.2% to 2.1% [1]. Group 1: Deposit Rate Adjustments - Multiple regional banks have accelerated the pace of deposit rate cuts, with some products seeing reductions of up to 80 basis points [1]. - Pingyang Pudong Rural Commercial Bank announced a reduction in various deposit rates, effective October 21, with the new rates for demand deposits dropping to 0.05% and significant cuts across different term deposits [1]. - The current three-year deposit rates at major banks like China Construction Bank and China Merchants Bank are significantly lower than the rates offered by smaller banks, with rates as low as 1.55% and 1.25% respectively [2][4]. Group 2: Interest Rate Inversion Phenomenon - There is a noticeable "inversion" in deposit rates, where shorter-term deposits offer higher rates than longer-term ones, leading to situations where "storing for three years is less beneficial than storing for one year" [1]. - This inversion is attributed to expectations of declining interest rates and banks' need to adjust their liability structures [6]. - Experts suggest that the pressure on the liability side is prompting banks to lower long-term deposit rates to optimize their funding costs [6].

Core Viewpoint - Recent interest rate cuts on deposits by several small and medium-sized banks indicate a shift in the banking sector, with some banks reducing rates by as much as 80 basis points, reflecting a broader trend of interest rate adjustments in response to market conditions [1] Group 1: Interest Rate Adjustments - Multiple regional banks, including Pingyang Pudong Development Village Bank, Fujian Huatong Bank, and Huixian Zhujiang Village Bank, have announced reductions in deposit interest rates since October [1] - The adjustments have led to a phenomenon of "inverted" deposit rates, where longer-term deposits yield lower returns than shorter-term ones, with some banks showing scenarios where a three-year deposit is less favorable than a one-year deposit [1] Group 2: Factors Influencing Rate Changes - The occurrence of inverted deposit rates among various banks is attributed to expectations of declining interest rates and the need for banks to adjust their liability structures [1]

Core Viewpoint - The recent trend of banks lowering deposit interest rates has become commonplace, particularly among small and medium-sized banks, with significant reductions in long-term deposit rates due to strong market expectations for future interest rate cuts [1][2][3]. Group 1: Deposit Rate Adjustments - Multiple banks, especially small and medium-sized ones, have recently announced reductions in deposit rates, with the most significant cuts observed in three-year and five-year deposit rates, decreasing by 15 to 40 basis points [1][2]. - Shanghai Huari Bank reduced its three-year fixed deposit rate from 2.3% to 2.15%, marking the seventh rate cut this year, with similar actions taken by other small banks [2][3]. - The overall trend shows that national banks' three-year and five-year fixed deposit rates have dropped to the 2% range, with some even falling below 1% [3][5]. Group 2: Reasons for Rate Cuts - The primary reasons for the recent deposit rate cuts include the need to address net interest margin pressures and the desire to reduce funding costs in a declining deposit rate environment [3][4]. - Analysts suggest that the adjustments are not coincidental but are related to the economic realities, indicating a potential improvement in the operational ecosystem of small and medium-sized banks [5][6]. Group 3: Interest Rate Inversion - A notable phenomenon is the frequent occurrence of interest rate inversion, where long-term deposit rates are lower than short-term rates, contrary to typical expectations [6]. - For instance, Shanghai Huari Bank's three-year deposit rate is 2.15%, while the five-year rate is slightly lower at 2.1%, highlighting this inversion trend [6]. - Analysts believe that banks are intentionally guiding depositors towards shorter-term deposits to manage the costs associated with long-term deposits, indicating a strategic shift in deposit pricing [6].