Small and medium-sized banks initiate a new round of deposit listing interest rate adjustments

By: Chen Jiayi

With the “strong start” wrap-up, several small and medium-sized banks have recently begun a new round of adjustments to their posted deposit listing rates. Jilin Bank, Xiamen Bank, Fujian Strait Bank, and others have issued announcements in recent days, cutting the posted listing rates for certain maturities of time deposits. Previously, banks’ posted deposit listing rates had already gone through multiple rounds of rate reductions.

Analysts say that with the “strong start” phase at the beginning of the year coming to an end, combined with the continued pressure on net interest margins, banks have entered a window period for centralized management of liability costs. Adjustments to posted deposit listing rates are expected to continue, and overall they are showing a trend of gradually easing toward stabilization, along with differentiation in the structure. In a low-interest-rate era, respondents suggest that individual investors should adopt a diversified asset allocation approach to balance returns and risks.

Several banks cut deposit interest rates

On April 1, Jilin Bank issued an announcement adjusting its RMB deposit posted listing rates. For three-year fixed-term deposit products, the annualized interest rate was cut by 5 basis points from 1.75% to 1.70%. After the adjustment, the yield inversion gap between the bank’s three-year and five-year fixed-term deposit rates narrowed to 10 basis points.

Xiamen Bank recently announced that effective April 1 it would adjust the posted listing rates for certain retail deposit products. The posted listing rates for one-day and seven-day notice deposits were each cut by 5 basis points, dropping to 0.6% and 0.9%, respectively. Fujian Strait Bank also announced recently that effective March 27 it would adjust the posted listing rates for call deposits and one-day notice deposits, and effective April 1 it would adjust the posted listing rate for seven-day notice deposits.

Not only that—some banks reduced posted deposit listing rates multiple times within a short period. For example, Xiamen Bank previously reduced the posted listing rates for individual one-year, three-year, and five-year interest-withdrawal time deposits and one-day notice deposits on March 27, with cut sizes of 10 basis points, 20 basis points, 20 basis points, and 5 basis points, respectively.

Nanjing Pukou Jingfa Rural Bank made three adjustments to its RMB deposit posted listing rates in March. Specifically: effective March 2, the deposit rates for institutions and individuals for three-year and five-year terms were adjusted from 2.2% to 1.88%; effective March 9, the one-year deposit rate for individuals was adjusted from 1.85% to 1.65%, and the two-year deposit rates for institutions and individuals were adjusted from 1.8% to 1.65%; effective March 20, the bank adjusted the rates across the board for individual and institutional fixed-term deposits with maturities from three months to five years.

Stabilize net interest margins by controlling liability costs

Regarding the frequent adjustments by multiple banks to their posted deposit listing rates, analysts say: on the one hand, with the “strong start” wrap-up, banks have refocused on controlling liability costs and reduced the deposit rates that had been temporarily raised during the prior period. Tian Lihui, a professor of finance at Nankai University, said in an interview with a reporter from Shanghai Securities News that after the “strong start” wrap-up, banks complete their phased deposit-gathering tasks; the rate downward pressure that had been temporarily suppressed to drive scale releases in concentrated fashion. On the other hand, against the backdrop of net interest margin pressure, lowering deposit rates has become a common choice for banks to stabilize net interest margins.

“Currently, China’s banking industry net interest margins are at a low level. Several small and medium-sized banks reduce deposit rates in order to lower liability costs and stabilize net interest margins, and it also helps banks improve the sustainability of their services to the real economy,” said Lou Feipeng, a researcher at China Postal Savings Bank, to a reporter.

At present, it is the season for annual report disclosures, and many listed banks have mentioned in earnings briefings or annual reports that net interest margins are expected to stabilize going forward. On March 27, at the 2025 annual results press conference, Yao Mingde, vice president of Industrial and Commercial Bank of China, said it is expected that this year’s net interest margin decline will further converge compared with 2025. “In the short term, the downward trend in net interest margins has not changed, but favorable factors for improving net interest margin performance are continuing to accumulate, and the momentum toward marginal stabilization is expected to continue.”

Future deposit rates may continue to be adjusted

If we look at a longer time horizon, it is already an indisputable fact that deposit rates have been reduced. Looking ahead, analysts generally believe that future deposit-rate adjustments may take the form of a gradual easing toward stabilization, along with differentiation in the structure.

Tian Lihui said: on the one hand, in 2026, a batch of high-interest fixed-term deposits will mature in concentration, and banks’ interest-payment costs are expected to improve significantly; on the other hand, since net interest margins are already at a historical low, there is limited room for further large contraction. Therefore, the room for deposit rates to keep falling is relatively limited overall, with trends such as a gradual, slope-like easing downward of rates, differentiation in structure, and more precise pricing.

Wang Pengbo, a senior analyst covering the financial industry at Bowen Analysis, expects that future adjustments to posted deposit listing rates will continue with a pattern of small, incremental changes and structural differentiation. Overall, the interest-rate center of gravity will remain steadily moving downward. The spread between short- and long-term rates may narrow somewhat, and the inverted yield phenomenon may become even more common. Under regulatory policy guidance, interest rates will not decline in an disorderly way or lead to malicious deposit-gathering, and there will not be a cliff-like drop. For small and medium-sized banks, the magnitude of adjustment will likely still be greater than that of state-owned large banks. There remains room to lower interest rates for longer-maturity deposit products, and banks’ liability structure will also gradually tilt toward the medium- and short-term.

With continued reductions in deposit rates, the era of “earning passively while keeping deposits” has already ended. Industry insiders suggest that investors can make diversified asset allocations based on their own risk tolerance. Wang Pengbo said that against the backdrop of declining deposit attractiveness, individual investors are more suitable to adopt a layered allocation approach to balance returns and liquidity.

Tian Lihui also believes individual investors may consider building a layered allocation structure of “cash management + fixed income + mid-to-low-volatility equity.” The core principle is to accept the reality of low interest rates: replace single savings with diversified allocation, and replace capital-protection thinking with risk management.

(Editor: Wen Jing)

Keywords:

                                                            Banks
                                                            Interest rates