On August 22, Caixin learned that since the new round of deposit rate adjustment by major banks started on July 25, small and medium-sized banks have continued to follow suit. Caixin reporters found that many small and medium-sized banks, including Shanxi Wuxiang Rural Commercial Bank, have lowered their deposit rates today. Among them, some banks have made a second adjustment to their deposit rates within this month.

Industry insiders told Caixin reporters that with the decline of LPR in July, banks are facing pressure to narrow their net interest margins. Most banks will choose to lower their deposit rates to reduce funding costs and maintain a reasonable level of interest margins. As a result, banks have launched a new round of deposit rate cuts. Different banks have different adjustment rhythms and magnitudes due to their basic conditions and other factors.

Small and medium-sized banks have continued to lower their deposit rates, and some banks have made a second adjustment to their deposit rates for certain terms within this month.

Many small and medium-sized banks have continued to follow suit and lower their deposit rates. Shanxi Wuxiang Rural Commercial Bank recently announced that it has adjusted the RMB deposit rates in accordance with relevant policy requirements, starting from August 22. Wuzhou Urban and Rural Credit Cooperative in the city also announced the adjustment of RMB deposit rates starting from August 21. Nanning Yonning District Rural Credit Cooperative also announced the adjustment of the listed annual interest rates for RMB deposits for fixed-term withdrawals, fixed-term deposits, principal-and-interest deposits, agreed deposits, and notice deposits starting from August 21.

Caixin reporters found that for certain terms, some banks have already made two adjustments within this month. A staff member of Shanxi Wuxiang Rural Commercial Bank's branch told Caixin that the deposit rates for 2-year and 5-year terms have been lowered today, making it the second interest rate cut within this month. Specifically, the deposit rate for a 2-year term has been lowered from 2.3% to 2.2% within this month, and further decreased to 2.1% today. The deposit rate for a 5-year term, after being lowered from 2.65% to 2.5% earlier this month, has been further lowered to 2.4% today.

"For other terms, the deposit rates have already been lowered within this month. Specifically, the rate for a 1-year term has been adjusted from the original 2% to 1.9%, and the rate for a 3-year term has been lowered from 2.6% to 2.3% within this month," the staff member mentioned.

Guangxi Zhongshan Rural Commercial Bank has also adjusted its RMB deposit rates starting from August 21. According to the information, this is the second announcement of adjusting the deposit rates in nearly a month by Guangxi Zhongshan Rural Commercial Bank. The related information shows that starting from August 1, Guangxi Zhongshan Rural Commercial Bank has adjusted the listed interest rates for certain terms of RMB deposits. After the adjustment, the listed interest rates for 6-month, 1-year, 2-year, 3-year, and 5-year fixed-term deposits are 1.6%, 1.9%, 2.35%, 2.6%, and 2.6% respectively.

Guangxi Zhongshan Rural Commercial Bank's adjusted RMB deposit interest rate listing table starting from August 21 shows that the deposit interest rates for 6 months, 1 year, 2 years, 3 years, and 5 years fixed-term deposits are 1.6%, 1.8%, 2.1%, 2.6%, and 2.6% respectively. Compared with the beginning of the month, Guangxi Zhongshan Rural Commercial Bank has lowered the 1-year and 2-year deposit interest rates by 10 basis points and 25 basis points respectively.

According to Ai Yawen, an analyst at the Rong360 Digital Technology Research Institute, in the current environment of declining market interest rates and facing continued pressure on net interest margins, some banks have directly lowered their deposit interest rates, while others have adjusted their deposit interest rates at a slower pace. This may be a strategic performance of the banks, reflecting their strategy adjustments and refined management in a complex market environment.

With the general decrease in interest rates, the average interest rate for a 2-year fixed deposit has dropped to below 2%.

According to statistics and analysis of deposit interest rate data from 689 branch outlets of 82 banks in 36 key cities in China monitored by the Rong360 Digital Technology Research Institute, in July, the average interest rate for a 3-month fixed deposit was 1.481%, the average interest rate for a 6-month fixed deposit was 1.689%, the average interest rate for a 1-year fixed deposit was 1.817%, the average interest rate for a 2-year fixed deposit was 1.94%, the average interest rate for a 3-year fixed deposit was 2.339%, and the average interest rate for a 5-year fixed deposit was 2.295%.

Compared to the previous month, the average interest rates for all terms of fixed deposits have declined. Among them, the interest rate for a 3-month deposit has dropped by 8.4 basis points, the interest rate for a 6-month deposit has dropped by 8.1 basis points, the interest rate for a 1-year deposit has dropped by 8.3 basis points, the interest rate for a 2-year deposit has dropped by 16.7 basis points, the interest rate for a 3-year deposit has dropped by 16.8 basis points, and the interest rate for a 5-year deposit has dropped by 13.8 basis points. From the data, it can be seen that the reduction in medium-term and short-term interest rates is much smaller than the reduction in long-term interest rates, and the deposit rates for 3 and 5-year terms continue to be inverted, with the 5-year rate remaining lower than the 3-year rate. Ai Yawen said that this indicates that most banks are more willing to attract short-term funds and tend to guide customers to choose short-term deposits in order to reduce funding costs.

Ai Yawen further stated that the phenomenon of inverted deposit rates is the result of the combined effects of the macroeconomic environment, bank operating strategies, policy guidance, and market expectations. Currently, the banking industry is expected to continue to see a declining trend in overall interest rates. In order to reduce funding costs, banks are more inclined to attract short-term funds and guide customers to choose short-term deposits through product strategy adjustments, such as lowering the interest rate for 5-year deposits. Looking ahead, with the pressure on net interest margins and the background of declining loan interest rates, there is still room for further downward adjustment of deposit interest rates.

Under the general decrease in deposit interest rates, for investors with a more conservative investment style, what financial products can be considered? A client manager from a major bank told the Caixin reporter that for money that is not needed in the short term, one can choose short-term bond funds, interbank certificates of deposit index funds, and cash management products. These products are all considered as 'liquid' investment options, relatively stable, and offer higher yields than current deposits. In addition, for money that is not needed in the medium to long term, one can choose financial products with different characteristics depending on their risk preferences, such as long-term closed-end wealth management products, savings national bonds, and increasing permanent life insurance.