Driven by external factors and the general decrease in loan interest rates, small and medium-sized banks have also started to lower their deposit rates.
In mid-October alone, rural banks in Heilongjiang, Jilin, Henan, Hainan, Xinjiang, and other regions proactively reduced their deposit rates.
During this round of adjustments, the rural commercial banks generally lowered their rates by 20 basis points (0.20%), with some even reaching 80 basis points, indicating significant efforts.
After continuous adjustments, most rural commercial banks now offer 5-year deposit rates around 2.2%. Although this rate is still higher than that of large state-owned banks, the rate cuts compared to before are quite remarkable.
<h2>Multiple Banks Lower Deposit Rates</h2>
In the past week, several banks have announced reductions in deposit rates.
According to the latest announcement from Jingyu Qianfeng Rural Bank, the rates for one-year, two-year, three-year, and five-year savings deposits have been lowered to 2.15%, 2.25%, 2.60%, and 2.60% respectively. Among them, the rates for two-year, three-year, and five-year fixed deposits have all been reduced by 20 basis points.
This marks the fourth adjustment of deposit rates by Jingyu Qianfeng Rural Bank this year, reflecting the trend of small and medium-sized banks following the nationwide adjustment of deposit rates.
In addition, Henan Suiping Zhongyuan Rural Bank also announced adjustments to its deposit rates, marking the third rate adjustment announcement of the year for the bank. In this adjustment, the two-year deposit rate was reduced by 70 basis points, from 2.50% to 1.80%. At the same time, the five-year deposit rate was also lowered by 45 basis points, from 2.65% to 2.2%.
Heilongjiang Hailun Huifeng Rural Bank made its second adjustment to deposit rates this year, with a decrease ranging from 35 to 80 basis points. The bank's rate table, based on its own situation, shows that the three-year savings deposit rate is 2.20%, while the five-year savings deposit rate is only 2.15%, a rare occurrence.
Other banks that announced rate cuts in October include Fukang Jinhui Rural Bank, Qionghai Xingfu Rural Bank, Baishan Hunjiang Hengtai Rural Bank, Fenyang Jiudu Rural Bank, and Xinjiang Tacheng Rural Commercial Bank.
The pace of rate cuts by rural banks across the country shows no signs of slowing down.
<h2>Aligning with Industry Trends</h2>
In fact, banks have been continuously lowering deposit rates this year, leading to a narrowing of the interest margin as seen in their semi-annual reports.
As a result, the overall growth in interest income for banks has been lackluster, with some even experiencing negative growth.
Banks that have performed well in their mid-year reports have mostly excelled in non-interest income, which has compensated for the subdued interest income and even made up for the gap.
Perhaps due to these pressures, the banking industry as a whole has proactively lowered deposit rates multiple times this year to reduce the pressure of interest payments and maintain relatively healthy financial accounts.
Currently, the overall interest rates of the six major state-owned banks have dropped to below 1.80% (for five-year fixed deposits), as shown in the table below. <img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/7232ab74-04bc-4c97-95f2-91069e96ed17.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/7232ab74-04bc-4c97-95f2-91069e96ed17.png"/>
<h2>What are the future trends?</h2>
So, what is the future trend of deposit interest rates in the banking industry?
It seems that loan interest rates are still decreasing.
On September 29th, the central bank's guidance on market interest rate pricing self-discipline mechanism issued the &#34;Initiative on Bulk Adjustment of Existing Housing Loan Rates.&#34; In response, various banks have taken action. On October 12th, several banks announced bulk adjustments to existing individual housing loan rates.
According to the latest announcement, major banks such as Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, Postal Savings Bank of China, and many other banks have successively issued announcements that starting from October 25th, they will make bulk adjustments to existing individual housing loan rates.
Currently, except for cases of loans in Beijing, Shanghai, Shenzhen, and other areas that are second home loans, the rates for other eligible housing loans will be adjusted to the loan market quoted rate (LPR) minus 30 basis points.
Industry insiders estimate that the average reduction in interest rates for these assets will be between 20 to 50 basis points.
Considering that reducing existing housing loan rates may further compress banks' net interest income, banks still have the desire to continue lowering their cost of liabilities.
As household deposits are the most important and stable source of funds for commercial banks, the downward adjustment of their rates may be unavoidable in the current economic environment.
<h2>What are the strategies to deal with this?</h2>
With the decrease in deposit interest rates, the investment and financial management choices of individuals and families are also changing.
On one hand, the decrease in deposit interest rates means that the savings income of the people will decrease. Relying solely on bank deposits for financial management is far from enough. For ordinary depositors, based on their own situation, choosing diverse financial management methods while controlling market risks well can help achieve the preservation and appreciation of family assets.
On the other hand, the decrease in deposit interest rates may bring about changes in the overall situation of bank funds, which poses higher requirements for commercial banks in terms of allocation, investment, and risk control

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Small and medium-sized commercial banks have successively lowered deposit rates, influenced by external environment and declining loan rates. In mid-October, many rural banks across the country lowered deposit rates, with the reduction generally reaching 20 basis points and some banks even up to 80 basis points. Currently, the 5-year deposit rate has dropped to around 2.2%. Several banks such as Jingyu Qianfeng Rural Bank and Henan Suiping Zhongyuan Rural Bank have successively announced, indicating the trend of small and medium-sized banks adjusting deposit rates in line with the overall situation

- The recent decline in deposit rates among small and medium-sized banks in China is driven by external pressures and lower loan interest rates.  
- Various banks, including those in Heilongjiang and Henan, have reduced their deposit rates by up to 80 basis points, with most now around 2.2% for five-year deposits.  
- This trend reflects a broader industry response to shrinking interest margins and aims to alleviate financial pressures while prompting individuals to seek diverse investment options.

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Small and medium-sized commercial banks follow suit, officially announcing a general decrease in deposit interest rates