Core Viewpoint - The upcoming maturity of approximately 50 trillion yuan in fixed deposits by 2026 poses significant challenges for the banking sector in managing liabilities and may lead to a reallocation of household assets [3][4][5]. Group 1: Scale of Maturing Deposits - The maturity of fixed deposits is expected to reach around 50 trillion yuan in 2026, with a notable increase of about 10 trillion yuan from 2025 [4]. - The majority of this maturity will come from two- and three-year deposits, each exceeding 20 trillion yuan, while five-year deposits will be around 5-6 trillion yuan [4]. - Different research institutions estimate the total maturity of fixed deposits to be between 59 trillion and 75 trillion yuan, indicating a significant impact on the banking sector [5][6]. Group 2: Potential Directions for Maturing Funds - A substantial portion of the maturing funds is likely to remain within the banking system, as the deposit retention rate is high, around 96% [7]. - Consumers are expected to optimize their deposits by moving funds to banks offering higher interest rates, as seen in the case of a consumer moving funds from a state-owned bank to a city commercial bank [7]. - Consumer spending is projected to be a major outlet for these funds, with anticipated household consumption reaching 53 trillion yuan in 2025 [8]. Group 3: Investment Trends and Preferences - There is a growing trend towards reallocating funds into bank wealth management products, which are expected to see a net increase of approximately 3.7 trillion yuan in 2025 [8]. - Insurance products are also gaining popularity, particularly among high-net-worth individuals seeking long-term investment options [9]. - Some investors are diversifying their portfolios by allocating funds into bonds and stock-enhanced funds, indicating a shift in investment strategies [9]. Group 4: Market Dynamics and Bank Strategies - The banking sector is likely to face a re-pricing of a large volume of funds, with interest rates on large deposits declining significantly [16][17]. - The People's Bank of China has indicated potential for further interest rate cuts, which could help banks reduce their interest expenses and stabilize net interest margins [16]. - Banks are actively trying to optimize their liability structures by encouraging shorter-term deposits and promoting wealth management and insurance products [17][18].