Core Viewpoint - A new round of deposit rate cuts has been initiated by several major banks in China, leading to a decline in the attractiveness of large-denomination certificates of deposit (CDs) [1][5] Group 1: Deposit Rate Cuts - Major banks including ICBC, BOC, and CCB have lowered interest rates on various deposit products, including demand deposits, time deposits, and notice deposits [1] - The interest rates for large-denomination CDs are expected to fall below 2%, with current rates for 1-year and 2-year CDs at 1.2% and 3-year CDs at 1.55% [3][4] - Compared to last year's issuance, the rates for 1-year, 2-year, and 3-year CDs have decreased by 25 basis points and 35 basis points respectively [1][3] Group 2: Specific Bank Products - BOC's 2025 first phase of personal large-denomination CDs includes terms of 1 month, 3 months, 6 months, 1 year, 2 years, and 3 years, with rates ranging from 0.9% to 1.55% [3] - CCB's 1-year and 3-year large-denomination CDs have rates of 1.2% and 1.55% respectively, with no current offerings for 2-year and 5-year CDs [4] - Smaller banks and private banks are also reducing their large-denomination CD rates, with Tianjin Bank's 3-year and 5-year products now at 2.00% and 1.75% respectively [5][7] Group 3: Industry Trends - Since April, banks have been adjusting their deposit rates to manage costs amid narrowing interest margins, focusing on the liability side of their balance sheets [8] - The adjustments in deposit rates are aimed at improving interest income levels and providing room for further reductions in asset-side rates, thereby enhancing the banking sector's ability to support the real economy [8]

Group 1 - The article highlights the phenomenon of "interest rate inversion" among commercial banks, particularly affecting small and medium-sized banks, where longer-term deposit rates are lower than shorter-term rates [1][5] - Tianjin Bank's recent adjustment shows a 5-year deposit rate dropping to 1.75%, which is lower than the 2-year rate of 1.8% and the 3-year rate of 2% [1] - Similar cases are reported from other banks, such as Xinjiang Korla Fumin Village Bank and Shandong Yinan Blue Ocean Village Bank, indicating a widespread trend of lower long-term deposit rates [1] Group 2 - Large time deposits, once seen as high-yield savings tools, are also experiencing rate cuts, with Tianjin Bank's 3-year "Happiness Deposit" rate falling to 2.05% [5] - The trend of rate adjustments reflects banks' strategies to manage interest margin pressures by reducing long-term liabilities [5] - Experts suggest that depositors should reassess their investment strategies, considering alternatives like cash management products, money market funds, or government bonds to balance yield and liquidity [5]

Core Viewpoint - The article highlights the trend of decreasing interest rates on long-term deposits, indicating that shorter-term deposits are becoming more attractive to savers as banks adjust their rates in response to market conditions [1][2][12]. Group 1: Interest Rate Adjustments - As of May 13, 2023, Tianjin Bank adjusted its "Seagull Deposit" rates, showing a significant drop in the 5-year rate to 1.75%, which is lower than the 2-year rate of 1.8% [2][5]. - Other banks, such as Xinjiang Ku'erle Fumin Village Bank and Shandong Yinan Blue Ocean Village Bank, also reported that their 1-year deposit rates (2% and 1.8% respectively) are higher than their 5-year rates (1.95% and 1.8%) [6][12]. - The trend of "long-term deposits yielding less" is becoming common across various banks, indicating a shift in deposit strategies [5][11]. Group 2: Large Denomination Certificates of Deposit (CDs) - Large denomination CDs have also seen a decline in interest rates, with Tianjin Bank reducing its 3-year CD rate from 2.10% to 2.05% [8]. - The phenomenon of rate inversion is noted, where 3-year CDs yield higher rates than 5-year CDs, as seen with Xishang Bank's 3-year CD at 2.6% compared to 2.5% for the 5-year [8][12]. Group 3: Market Dynamics and Bank Strategies - Analysts suggest that the decline in long-term deposit rates is a strategic move by banks to manage their liabilities and optimize interest rate risk management [12]. - The competition for short-term deposits has intensified, prompting banks to raise short-term rates while lowering long-term rates [12]. - The People's Bank of China has also adjusted the 7-day reverse repurchase rate, which is expected to influence loan market rates and subsequently deposit rates [13].