Several small and medium-sized banks have lowered their medium- and long-term deposit interest rates to the "1% range."

Invest in stocks with Golden Kylin Analyst Reports—authoritative, professional, timely, comprehensive—helping you uncover potential thematic opportunities!

By Reporter Peng Yan

Since March, many city commercial banks, rural commercial banks, and village banks have consecutively lowered their fixed deposit interest rates. The interest rates for 2-year, 3-year, and 5-year fixed deposits at small and medium-sized banks generally fell below 2%, officially entering the “single-digit” era.

Luo Feipeng, a researcher at China Postal Savings Bank, analyzed in an interview with Securities Daily that this is mainly due to the narrowing of net interest margins and the continued decline in loan rates. It also reflects that the banking industry has entered a stage of refined liability management, guiding funds toward medium- and short-term through inverted interest rates. At the same time, this marks the acceleration of deposit rate marketization, with small and medium-sized banks shifting from extensive deposit gathering to differentiated competition.

Specifically, this round of deposit rate adjustments covers a wide range, with many small and medium-sized banks in Hubei, Yunnan, Xinjiang, Jiangsu, Shanghai, and other regions announcing deposit rate changes.

For example, on March 11, Hubei Three Gorges Rural Commercial Bank announced adjustments to RMB deposit rates. The fixed deposit rates for 3-year and 5-year terms were both adjusted to 1.50%, down 5 basis points from previous rates; the “Fuman Ying” series products’ 1-year, 2-year, and 3-year annual interest rates were lowered to 1.15%, 1.25%, and 1.55%, respectively, decreasing by 25, 25, and 30 basis points.

Nanjing Pukou Jingfa Village Bank also recently announced that starting March 9, 2026, the personal 1-year deposit rate was adjusted from 1.85% to 1.65%, and the corporate and personal 2-year deposit rate from 1.8% to 1.65%. Additionally, from March 2, 2026, the bank lowered the rates for 3-year and 5-year fixed deposits to 1.88%, down 32 basis points from the previous 2.2%.

Furthermore, banks such as Shandong Chiping Hunan Rural Commercial Bank, Yunnan Yuanjiang North Silver Village Bank, Xinjiang Bank, Shanghai Songjiang Fuming Village Bank, and Heilongjiang Youyi Rural Commercial Bank have all lowered their deposit listing rates in March, mainly for long-term fixed deposits, with reductions ranging from 5 to 30 basis points.

According to the regulatory indicators for the banking industry in Q4 2025 released by the National Financial Regulatory Administration, as of the end of Q4 2025, the net interest margin of commercial banks was 1.42%, unchanged from Q3 and Q2. By institution type, city commercial banks and rural commercial banks had net interest margins of 1.37% and 1.60%, respectively. Under the continued low net interest margins and the low level of Loan Prime Rate (LPR), the cost pressure on bank liabilities has further increased.

Xue Hongyan, a special researcher at Sichuan Commercial Bank, told Securities Daily that with multiple cuts in the LPR leading to lower asset yields, small and medium-sized banks, which are more sensitive to liability costs, find it difficult to continue expanding scale through high-interest deposit gathering. This round of rate cuts is not only a follow-up to the previous rate adjustments by nationwide commercial banks but also a response to regulatory guidance, shifting from scale expansion to cost control and efficiency improvement for high-quality development.

Luo Feipeng stated that in the future, deposit rates at small and medium-sized banks will continue to decline, with long-term product rates possibly further decreasing. The proportion of short-term products may increase, and the phenomenon of interest rate inversion could become more common, reflecting a consensus in the industry that long-term interest rates will stay low. These banks will also pay more attention to optimizing deposit structures, launching differentiated products through digital channels, and improving the precision of liability management.

Further, Xue Hongyan said that looking ahead, the trend of bank deposit rates will depend more on macroeconomic conditions, real financing demand, and the flexible use of monetary policy tools. If significant changes occur in these factors, interest rates may adjust accordingly. Under this context, the rate differentiation between banks and among different maturities may persist: institutions with stable operations and lower liability pressures might further compress deposit costs, while banks facing greater deposit gathering pressure will implement differentiated pricing based on their needs. Meanwhile, the maturity structure of deposit rates may continue to adjust; if ultra-long-term products become less attractive, funds will be further directed toward medium- and short-term deposits, helping banks optimize liability structures and stabilize net interest margins. Overall, bank deposit rates are entering a more flexible, competitive market-oriented phase.

		Sina Statement: This message is reproduced from Sina's partner media. Sina.com publishes this article to convey more information and does not imply endorsement of its views or verification of its content. The article is for reference only and does not constitute investment advice. Investors operate at their own risk.

Comprehensive news and precise analysis, all on Sina Finance APP

Editor: Gao Jia