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Following the New Year, several small and medium-sized banks have increased their deposit rates, with the highest increase reaching up to 65 basis points.

AInvestFriday, Jan 3, 2025 10:31 pm ET
2min read

Despite the overall downward trend in deposit rates, several small and medium-sized banks have raised the quoted rates of fixed deposits after the Spring Festival. According to sources from several banks including Liupu Rural Commercial Bank in Guangxi, the quoted rates of fixed deposits were raised after the Spring Festival. In addition, some banks raised the interest rates of certain terms when the deposit amount reached a certain amount. The highest increase reached 65 basis points.

"The adjustment is mainly for the quoted rates of fixed deposits," said a staff member of Liupu Rural Commercial Bank. According to the bank's announcement, the quoted rates of fixed deposits of 3 months, 6 months, 1 year, 2 years, 3 years, and 5 years were raised from 0.8%, 1%, 1.1%, 1.2%, 1.5%, and 1.55% to 1.2%, 1.45%, 1.55%, 1.85%, 1.85%, and 1.85%, respectively, as of January 2, 2025.

Yiling Xingfu Rural Commercial Bank raised the quoted rates of fixed deposits on January 1, 2025. The adjusted interest rates show that the bank's 1-year and 2-year deposits (starting from 50 yuan) are 1.75% and 1.85%, respectively, with corresponding interest rates of 1.86% and 1.96% for deposits of 30,000 yuan or more. Maanshan Rural Commercial Bank said that it adjusted the interest rates of deposits on January 1, 2025, with 1-year and 2-year deposits (starting from 50 yuan) at 1.65% and 1.75%, respectively, and 1.85% and 1.95% for deposits of 50,000 yuan or more.

Several banks also raised the interest rates of certain terms in the last month of 2024, with the highest increase reaching 20 basis points. For example, in early December 2024, Ruyang Rural Commercial Bank said that the deposit rates were raised across the board, with the 3-year rate reaching 2.05%, starting from 10,000 yuan; in addition, Yuzhou Rural Credit Union also raised the deposit rates, with the 1-year rate reaching as high as 1.71%.

Industry insiders said that small and medium-sized banks have limited ability to attract deposits compared to large banks, and may raise the interest rates of certain terms to optimize the asset-liability structure. However, from a medium- to long-term perspective, the overall trend of deposit rates is downward, and the adjustment situation and adjustment range of different banks mainly depend on their own situation and reference to the interest rate adjustment of similar banks.

Ai Yawen, an analyst of the Digital Technology Research Institute of Rong360, pointed out that small and medium-sized banks have limited ability to attract deposits compared to large banks, and high interest rates are conducive to attracting depositors. Facing the pressure of attracting deposits, small and medium-sized banks may consider optimizing the asset-liability structure and raise the interest rates of certain terms in a phased manner. "By raising the interest rates of certain terms in a phased manner, banks can attract more medium- and long-term deposits, which can help reduce the bank's reliance on short-term liabilities and lower the liquidity risk, thus improving the stability of deposits," he said.

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