Chinese private banks raise long-term deposit rates to 2%, bucking industry cuts
Several Chinese private banks have raised interest rates on medium- and long-term personal time deposits, reversing a broader industry trend of cutting such rates. WeBank increased its 3-year rate by 15 basis points to 1.75% on September 1, while Huarui Bank raised its 5-year rate to 2.00% on June 30. Sushang Bank also reintroduced 5-year certificates of deposit at 1.85%. Experts view this as a temporary self-rescue by private banks facing deposit outflows, but expect other banks to maintain their strategy of reducing high-cost long-term liabilities.
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Common ground
- Private banks in China are raising deposit rates while state-owned banks are cutting them, creating a clear divergence in the banking system.
- The inverted yield curve on deposits (3-year rates higher than 5-year) is a notable signal that all sides agree is significant.
- Household deposits have grown by nearly 7 trillion yuan in the first eight months, indicating a shift in saving behavior.
- Private banks have a net interest margin of 3.63%, which is more than double the industry average.
Points of contention
- Eastern Agent sees the deposit rate adjustments as strategic and a sign of resilience, while Regional and Neutral Agents view them as desperate moves to attract funds.
- Eastern Agent argues that rising household deposits reflect confidence and stable incomes, but Regional Agent insists it shows fear and economic uncertainty.
- Regional Agent claims the system has a colonial-style hierarchy where private banks are left to fail, while Eastern Agent says it's a designed multipolar system with coordinated support.
- Neutral Agent says the inverted yield curve is a gamble on future rate cuts, but Eastern Agent calls it a calculated response to clear policy signals.
Blind spots
- All sides overlook the real-world impact on ordinary depositors, who are caught between low state bank rates and risky private bank offers.
- The debate ignores how the private banks' business model of high-cost deposits funding riskier loans might fail if the economy slows further.
- There is little discussion of whether the regulatory safety net actually protects depositors in private banks if they collapse.
WorldAttention’s read
The roundtable shows deep divisions over whether China's private banks raising deposit rates is a sign of strength or desperation. The Eastern Agent defends it as strategic management within a stable, coordinated system, while the Regional Agent sees it as a survival struggle in a two-tier hierarchy that hurts ordinary people. The Neutral Agent focuses on the math, arguing the inverted yield curve and high funding costs make this a risky gamble that could backfire. All sides agree the situation is significant, but they disagree on what it means—whether it's resilience, a crisis of trust, or a business model hitting its limits. The blind spot is the human cost for depositors and small businesses, which gets lost in the technical and ideological arguments.
Reporting timeline
Chinese Private Banks Raise Long-Term Deposit Rates to 2% Amid Industry Trend to Lower Costs
Several Chinese private banks have quietly raised interest rates on medium- to long-term personal time deposits, reversing a broader industry trend of cutting such rates. According to a report by International Financial News, WeBank raised its 3-year rate by 15 basis points to 1.75% on September 1, while its 5-year product offers 1.60%. Huarui Bank increased its 5-year rate to 2.00% on June 30. Sushang Bank listed a 5-year jumbo certificate of deposit at 1.85%. Analysts attribute the moves to liability-side pressure and deposit outflows after earlier rate cuts. Shao Hui, an assistant professor at Zhejiang University, described the actions as 'stage-specific self-rescue' by private banks facing high customer acquisition costs. He and other analysts expect large state-owned banks and joint-stock banks to maintain their current strategies of reducing high-cost long-term liabilities rather than following the private banks' lead. The report notes that private banks' net interest margin stood at 3.63% in Q2 2025, well above the industry average of 1.41%.
Read sourceChinese private banks buck trend by raising long-term deposit rates to 2%
Several Chinese private banks have quietly adjusted their personal time deposit rates, with some raising rates on 3-year and 5-year products to the '2%' level, according to a report by International Finance News. WeBank raised its 3-year rate by 15 basis points to 1.75% on September 1, while Huarui Bank increased its 5-year rate to 2.00% in June. This marks a reversal from the industry trend of cutting long-term deposits. The report notes that 5-year certificates of deposit have also returned, with Susheng Bank offering a 1.85% rate. Experts cited in the article view this as a temporary measure by private banks facing deposit outflows and high customer acquisition costs. ZIBS assistant professor Shao Hui said other banks are unlikely to follow suit, as the industry direction remains toward reducing high-cost long-term liabilities. Data shows private banks' net interest margin stood at 3.63% in Q2 2025, well above the industry average of 1.41%.
Read sourceChinese Private Banks Raise Long-Term Deposit Rates to 2% Amid Industry Trend of Lowering Costs
Several Chinese private banks have quietly adjusted personal time deposit rates, notably raising rates on 3-year and 5-year products to the '2%' range, reversing a previous trend of favoring short-term deposits. WeBank increased its 3-year rate by 15 basis points to 1.75% on September 1, while Huarui Bank raised its 5-year rate to 2.00% on June 30. Some banks, like Sushang Bank, have also reintroduced 5-year certificates of deposit with a 1.85% rate, offering a premium over state-owned banks' 1.55%-1.60% rates. Experts attribute this move to liability-side pressure and a 'self-rescue' strategy to stabilize deposit bases after earlier rate cuts led to deposit outflows. However, analysts from Kaiyuan Securities and ZIBS professor Shao Hui believe other banks are unlikely to follow, as the broader industry trend remains focused on reducing high-cost long-term liabilities. The article notes that private banks' net interest margin stood at 3.63% in Q2 2025, well above the industry average of 1.41%.
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Multiple Chinese Private Banks Raise Deposit Rates Amid Industry Trend of Cuts
Several private banks in China have bucked the industry trend by raising deposit rates on some products, according to a report by Cover News. WeBank increased its 3-year deposit rate by 15 basis points to 1.75%, while its 5-year rate remains at 1.6%, creating an inversion. Other banks, such as Sushang Bank, have reintroduced medium- to long-term deposit products, including 5-year certificates of deposit at 1.85% and 3-year CDs at 1.95%. This follows a period in June when multiple private banks, including Beijing Zhongguancun Bank, Hunan Sanxiang Bank, and Yilian Bank, had removed 5-year fixed deposit products. Professor Tian Lihui of Nankai University stated that these moves are phased and structural, and that reducing high-cost liabilities remains the mainstream banking strategy due to narrowing net interest margins. He advised households to shift from single savings to layered asset allocation, diversifying according to risk tolerance.
Read sourcePrivate Banks Raise Medium- and Long-Term Deposit Rates to Above 2%
Several private banks in China have quietly raised interest rates on medium- and long-term personal term deposits, bucking the broader industry trend of reducing long-term high-cost liabilities. WeBank increased its 3-year fixed deposit rate by 15 basis points to 1.75% and reintroduced 5-year products, while Huarui Bank raised its 5-year rate to 2.00%. Some banks have also launched 5-year large-denomination certificates of deposit with rates as high as 1.85%, significantly above state-owned bank offerings. Experts interviewed, including Shao Hui from Zhejiang University, view this as a phased self-rescue effort by private banks facing deposit outflows and high customer acquisition costs. They believe other types of banks, including state-owned and joint-stock banks, are unlikely to follow suit due to diversified funding sources and the overarching industry trend of reducing long-term high-cost liabilities. Data shows private banks' net interest margin rose to 3.63% in Q2, well above the industry average of 1.41%.
Chinese Private Banks Raise Long-Term Deposit Rates to 2% Amid Industry Trend of Lowering Costs
Several Chinese private banks have recently raised interest rates on medium- to long-term personal time deposits, bucking the broader industry trend of lowering high-cost liabilities. According to a report by International Financial News, WeBank increased its 3-year deposit rate by 15 basis points to 1.75% on September 1, while its 5-year product offers 1.60%. Huarui Bank raised its 5-year rate to 2.00% on June 30. Some banks, like Sushang Bank, have also re-listed 5-year large-denomination certificates of deposit at 1.85%, significantly higher than state-owned banks' 1.55%-1.60%. Experts attribute this move to liability-side pressure and deposit outflows after earlier rate cuts. ZIBS assistant professor Shao Hui described it as a 'temporary self-rescue' and predicted other banks will not follow suit, as reducing long-term high-interest liabilities remains the industry direction. Data shows private banks' net interest margin stood at 3.63% in Q2 2025, well above the industry average of 1.41%.
Multiple Chinese Private Banks Raise Deposit Rates, Inverting Yield Curve
According to Jin10 Data on September 18, several private banks in China have recently raised interest rates on certain deposit products, bucking the broader industry trend of cutting rates amid narrowing net interest margins. WeBank increased its 3-year deposit rate by 15 basis points to 1.75%, while its 5-year rate remains at 1.6%, creating an inverted yield curve between the two terms. Other banks, such as Su Shang Bank, have reintroduced medium- to long-term deposit products, issuing 5-year large-denomination certificates of deposit at 1.85% and 3-year CDs at 1.95%. This comes after several private banks, including Beijing Zhongguancun Bank, Hunan Sanxiang Bank, and Yilian Bank, withdrew 5-year fixed deposit products in June. The moves signal a divergence in strategy among smaller lenders as they compete for deposits.
Read sourceMultiple Chinese private banks raise deposit rates, bucking industry trend of cuts
According to a Cailian Press report on September 18, several Chinese private banks have raised interest rates on certain deposit products, diverging from the mainstream banking industry trend of cutting deposit rates and withdrawing medium- and long-term deposit products due to narrowing net interest margins. WeBank increased its three-year deposit rate by 15 basis points from 1.6% to 1.75%, creating an inverted yield curve where the five-year rate (1.6%) is lower than the three-year rate. Other private banks, including Su Shang Bank, have reintroduced medium- and long-term deposit products, issuing five-year large-denomination certificates of deposit at 1.85% and three-year CDs at 1.95%. This follows a period in June when multiple private banks—including Beijing Zhongguancun Bank, Hunan Sanxiang Bank, and Yilian Bank—had withdrawn five-year fixed deposits. Finance professor Tian Lihui from Nankai University stated that these counter-trend adjustments represent phased and structural operations, but noted that reducing high-cost liabilities remains the prevailing strategy across the banking sector due to shrinking net interest margins.
Private Banks Raise Deposit Rates, Bucking Trend; Five-Year Products Return
Since September, several private banks in China have launched a new round of deposit-gathering efforts, bucking the broader trend of declining interest rates. WeBank, a leading private bank, raised its three-year fixed deposit rate from 1.6% to 1.75%, a 15-basis-point increase, marking its first rate hike in a year and a half. Other private banks, including MYbank, Su Shang Bank, XW Bank, and Huatong Bank, have relisted five-year fixed deposit products with rates ranging from 1.8% to 2.1%, after many had delisted such products in June. Lou Feipeng, a researcher at China Postal Savings Bank, attributed the moves to three factors: phased deposit-gathering strategies to lock in long-term liabilities amid concentrated maturities, hedging against the siphon effect of large banks that recently restarted five-year CDs, and differentiated liability management reflecting varying pressures and liquidity reserves. Industry experts caution that this does not signal a reversal of the downward trend in deposit rates but rather a phased divergence, with the medium- to long-term trend remaining a moderate decline due to narrowing net interest margins.
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