Several small and medium-sized banks cut the listed interest rates for long-term fixed deposits

Our reporter Xiong Yue

Starting in March, a group of banks lowered their listed deposit interest rates. According to our review, these banks are mainly regional small and medium-sized banks in Yunnan, Shandong, Xinjiang, and other areas. The affected deposit products include both short-term and long-term maturities, with a focus on long-term deposits. The rate cuts reached up to 30 basis points.

Specifically, recently, Xinjiang Bank Co., Ltd. announced an adjustment to its RMB deposit listing rates. Starting March 10, the bank adjusted its RMB deposit rates. This adjustment involved multiple fixed-term deposit products, including three-month, six-month, one-year, two-year, three-year, and five-year terms, with rate reductions ranging from 10 to 15 basis points.

Yunnan Yuanjiang Beiyin Village Bank Co., Ltd. announced that from March 1, 2026, it would adjust the interest rates of some deposit products. These include demand deposits, three-year, and five-year fixed deposits. The five-year fixed deposit saw the largest cut, decreasing by 30 basis points from 2.2% to 1.9%. As a result, all fixed-term deposit rates at this bank have moved away from the “2” percent range.

Additionally, several other rural commercial banks and village banks, such as Chiping Hunan Rural Commercial Bank, Heilongjiang Youyi Rural Commercial Bank (hereinafter “Heilongjiang Youyi Rural Commercial Bank”), and Nanjing Pukou Jingfa Village Bank, have also adjusted their deposit listing rates since March, generally lowering long-term fixed deposit rates.

After the rate adjustments, some banks’ fixed deposit products have experienced “inverted” rates. For example, Heilongjiang Youyi Rural Commercial Bank adjusted its demand deposits, three-year, and five-year fixed deposits starting March 1, 2026. The three-year fixed deposit rate was increased by 5 basis points, while the five-year rate was decreased by 10 basis points. After the adjustment, the three-year and five-year deposit rates are 1.75% and 1.60%, respectively.

Our reporter notes that, unlike the previous pattern where large state-owned banks led rate adjustments, small and medium-sized banks have been more proactive this year, adjusting deposit rates more frequently.

Lou Feipeng, a researcher at China Postal Savings Bank, told Securities Daily that since March, many small and medium-sized banks have lowered deposit rates, with some products showing inverted rates. This reflects banks’ response to net interest margin pressures, shifting from focusing on scale to controlling costs. When high-interest deposits mature and are re-priced, banks lower listing rates to reduce liability costs and ease profit pressures.

Tian Lihui, a finance professor at Nankai University, told reporters that in the future, deposit rates at small and medium-sized banks will generally trend downward with structural differentiation. The decline will continue but at a slower pace. A low-interest-rate environment will become the norm, with three-year fixed deposits generally maintaining rates in the “1” percent range, and some short-term products even entering the “0” percent range. Depositors should view the rate decline rationally and diversify assets to cope with the era of low interest rates.

Lou Feipeng believes that the downward trend in deposit rates at small and medium-sized banks will continue, but the decline may be smaller, and adjustments will become more refined.

(Edited by Qian Xiaorui)

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