On July 25, the six major state-owned banks, namely Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of China, Bank of Communications and Postal Savings Bank, collectively announced a reduction in the interest rate on deposits.
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Financial Investment News reporter Ji Xuejiao intern Yu Ruofei
A new round of deposit rate cuts has begun. On July 25, the six major state-owned banks, namely Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of China, Bank of Communications and Postal Savings Bank, collectively announced a reduction in the interest rate on deposits. This is the second time that the six major state-owned banks have lowered their deposit rates after December 2023. The interest rate adjustment involves a number of deposit products such as demand deposits, time deposits, and call deposits, and the reduction ranges from 5BP (basis points) to 20BP. Among them, the interest rate of medium and long-term deposits has been lowered by a large extent, and the listed interest rate of five-year lump sum deposits has dropped to 1.8%, entering the "1" era.
Data source: the official website of each bank, the deposit listed interest rate is for reference only, and the actual execution rate is subject to the final result. Cartography Wenwan
1. Five-year deposit rate reduced to 1.8%
According to the information published on the official website, after the adjustment, the listed interest rates of demand deposits of five banks, namely Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of China and Bank of Communications, were reduced by 5 basis points to 0.15%, and the listed interest rates of three-month, half-year and one-year lump sum deposits were reduced by 10 basis points, respectively to 1.05%, 1.25% and 1.35%; The listed interest rates for two-year, three-year and five-year lump sum deposits were all lowered by 20 basis points to 1.45%, 1.75% and 1.8% respectively.
The Postal Savings Bank's fixed deposits of all maturities maintained the same decline, but the adjusted interest rate level was slightly different. Among them, the half-year and one-year lump sum deposit and lump sum interest rates are adjusted to 1.26% and 1.38% respectively, and the interest rates of the rest of the tenors are consistent with those of the other five banks.
In addition, the interest rates of fixed deposits have been reduced by 10 basis points for all tenors. After the adjustment, the one-year, three-year and five-year deposit interest rates of Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank and Bank of Communications are 1.05%, 1.25% and 1.25% respectively, and the deposit interest rates of the Postal Savings Bank are 1.05%, 1.26% and 1.26% respectively. The listed interest rates for 1-day and 7-day call deposits were both lowered by 10 basis points, with the adjusted interest rates being 0.15% and 0.70% respectively.
It is worth noting that there is a certain difference between the listed interest rate and the actual execution interest rate, and the final execution annual interest rate may change with the deposit amount.
Taking China Construction Bank as an example, after this round of adjustment, the maximum annual interest rates of one-year, two-year and three-year fixed deposits are 1.6%, 1.7% and 2.15% respectively, while the five-year fixed deposit execution interest rate has not risen, and the maximum annual interest rate is still 1.8%. Among them, the annual interest rate of the three-year lump sum deposit is 1.75%, and if the deposit amount reaches 20,000 yuan, the annual interest rate can rise to 2.05%; If the deposit amount reaches 30,000 yuan, the annual interest rate can rise to 2.1%; If the deposit amount reaches $50,000, the interest rate can rise to 2.15% per annum.
2. Other banks may follow suit
Previously, on July 22, the People's Bank of China landed a "interest rate cut" combination, and the open market 7-day reverse repo operation rate was adjusted from the previous 1.80% to 1.70%, and on the same day, the LPR of 1 year and more than 5 years fell by 10 basis points simultaneously, to 3.35% and 3.85% respectively.
With the decline in LPR quotations, the expectation of a reduction in the deposit rate has risen again.
According to the report of Everbright Securities, after the current round of LPR interest rate cuts, a new round of deposit interest rate reduction cycle may be started, which will drive the broad-spectrum interest rate of deposits and loans to fall as a whole. At the same time, we should also pay close attention to whether the evolution trend of deposit "disintermediation" after the decline in deposit interest rates will be strengthened again, and then strengthen the expectation of a new round of downward bond interest rates.
In the context of stabilizing the net interest margin of banks and the market-oriented adjustment of deposit interest rates, the industry generally expects that bank deposit interest rates will usher in a new round of reduction. Looking ahead, other joint-stock banks and small and medium-sized banks are likely to follow suit with deposit rate adjustments.
Rong 360 Digital Technology Research Institute pointed out that due to the decline in loan interest rates and the regularization of deposits, the banking industry as a whole is still facing large downward pressure on interest rate spreads. According to the bank's financial report data for the first quarter of 2024, the net interest margin of most banks continued to narrow. Under the pressure of narrowing interest margins, commercial banks should continue to strengthen the management of their asset-liability portfolios. On the one hand, it is necessary to optimize the asset structure, do a good job in loan delivery, strengthen loan pricing management, promote the steady growth of credit scale, actively promote the development of intermediate business, and enhance investment capacity; On the other hand, it is necessary to promote the growth of low-cost core deposits, continue to reduce the volume and price level of high-cost deposits, and keep the interest rate spread level stable or slow down the trend of interest rate spread narrowing.
"With the second decline in the LPR this year, it is not ruled out that large state-owned banks and joint-stock banks will further reduce deposit interest rates in the future. If large banks continue to cut interest rates, it will put pressure on small and medium-sized banks, and the possibility of small and medium-sized banks following the rate cuts will continue to increase. Financial commentator Guo Shiliang said.
3. The attention of bank wealth management is increasing
On the other hand, with the reduction of deposit rates, analysts believe that it is possible to promote the "move" of deposits to wealth management.
According to the report of Everbright Securities, since the second quarter of 2024, the "disintermediation" of general deposits and the strict control of "manual interest supplement" on deposits have jointly driven the super-seasonal growth of wealth management scale. As of July 21, the scale of wealth management increased by about 1.5 trillion yuan from the beginning of the month to around 30 trillion yuan, and is expected to remain above 30 trillion yuan in the near future.
On the whole, investors who have switched from deposits to wealth management products generally have a lower risk appetite and prefer wealth management products with more stable returns. Among them, money market funds, cash management wealth management products and some fixed-income bank wealth management products with low risk have attracted attention.
So, what issues do investors need to pay attention to when switching from deposits to wealth management products? Puyi standard pointed out that wealth management products have the attribute of risk-bearing, different from deposits, the current wealth management products have entered the era of net worth, breaking the rigid payment, wealth management products in the income at the same time there is a certain risk of loss of principal, and strict implementation of risk classification system management, investors need to pass the risk assessment, appropriate selection and their own risk appetite matching wealth management products for investment.
Secondly, in terms of liquidity management, wealth management products have their own specific subscription and redemption mechanisms, and for different products of different institutions, investors need to confirm their basic information such as the subscription and redemption mechanism in the product manual.
In addition, investors should also note that there are fluctuations in the income of wealth management products, in which the past performance and performance comparison benchmark displayed are only used as the basis for calculating performance remuneration, and the performance comparison benchmark of many wealth management products has been lowered, investors should reasonably revise the income expectations of wealth management products, strengthen the absorption of investment and financial knowledge and pay attention to the financial market, so as to reduce emotional trading decisions.
Edited by Chen Yuhe
Calibration|Yuan Gang
Audit|Yao Yanru
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