Core Viewpoint - The article discusses the decline in interest rates for bank deposits in China, highlighting the challenges faced by ordinary citizens in asset allocation as banks begin to phase out high-interest deposit products starting in 2025 [1][4][5]. Summary by Sections Deposit Rate Changes - As of September 2025, the average interest rate for fixed-term deposits across over 400 banks in China has decreased by 0.32 percentage points since the beginning of the year, reaching a five-year low [3]. - The People's Bank of China reported that the total RMB deposits in financial institutions reached 285.6 trillion yuan, with a year-on-year growth of 9.3%, but the growth rate has slowed by 0.5 percentage points compared to the previous year [1]. Types of Deposit Products Being Phased Out - "Tiered interest" deposit products, which adjust rates based on central bank interest rate changes, are being reduced from over 20 banks in 2024 to only 8 by September 2025 [4]. - "Step-up" high-interest deposits, which offer increasing rates over time, are also being discontinued, with one bank halting its "Step Up" product in May 2025 [4]. - Exclusive high-interest deposits targeting specific groups, such as the elderly or military personnel, are being eliminated, with over 30 banks already canceling such offerings in 2025 [4]. Reasons for Changes - Banks are halting high-interest deposits to manage funding costs more effectively as interest rate liberalization progresses, which is crucial for maintaining profitability amid rising non-performing loan pressures [5]. - The average net interest margin for commercial banks fell to 1.76% in the first half of 2025, down 0.25 percentage points from 2023, indicating challenges in profitability [6]. - Regulatory measures have been introduced to curb excessive high-interest deposit competition, which poses systemic risks to the financial market [6]. Investment Strategies - Diversification is emphasized as a key strategy in the current low-interest environment, suggesting a balanced allocation among various financial instruments such as savings, government bonds, and low-risk investment products [7]. - The average yield for fixed-income investment products was reported at 3.2% in Q3 2025, which remains competitive compared to traditional deposits [8]. - Caution is advised regarding high-interest deposit products that may have hidden conditions or penalties for early withdrawal, as these can diminish actual returns [8][11]. Long-term Financial Management - The article suggests that individuals should adapt to a prolonged low-interest rate environment by enhancing financial literacy and exploring diverse investment options beyond traditional bank deposits [12]. - For risk-averse individuals, government-supported retirement financial products are recommended, while those with higher risk tolerance may consider equity investments like index funds for potentially better long-term returns [11][12].