Core Viewpoint - In early 2025, China's small and medium-sized banks are experiencing a significant divergence in deposit interest rates, with many private banks lowering rates while some regional rural commercial banks and village banks are raising rates to attract deposits [1][2]. Summary by Sections Private Banks Lowering Rates - Multiple private banks have recently announced reductions in deposit interest rates, with Chongqing Fumin Bank lowering its three-year deposit rate to 2.6% and five-year rate to 2.5%, marking the fifth adjustment since last year [1]. - Beijing Zhongguancun Bank also reduced its two-year deposit rate from 2.4% to 2.2% [2]. - A total of at least eight out of 19 private banks have lowered their deposit rates in February alone [2]. Reasons for Rate Reductions - Experts suggest that the recent rate cuts by some banks align with the overall trend of declining deposit rates, helping to reduce liability costs and stabilize net interest margins [2][3]. - The net interest margin for private banks has been narrowing, with an average profit of less than 1 billion yuan per bank in 2024 [3]. Regional Banks Raising Rates - In contrast, several rural commercial banks have increased their deposit rates, such as Wutai Rural Commercial Bank raising its three-year rate from 2.0% to 2.15% [4]. - Other banks, including Henan Yima Rural Commercial Bank and Shanxi Shouyang Village Bank, have also raised rates, with many offering rates above 2% for longer-term deposits [5]. Implications for Investors - Experts recommend that investors diversify their asset allocation based on their risk tolerance and financial goals, considering both deposit products and other investment vehicles like funds and wealth management products [7][8]. - The trend of varying deposit rates among banks is expected to continue, with regulatory guidance becoming stricter on high-interest deposit strategies [7].