Deposits "raise" can not be suppressed, after New Year's Day, many small and medium-sized banks raised their deposit rates, with the highest increase reaching 65 basis points.

In the context of the overall downward adjustment of deposit rates, after New Year's Day, many small and medium-sized banks have defied the trend and raised their fixed deposit rates. According to Caixin reporters, Guangxi Lipu Rural Commercial Bank and other banks have raised their fixed deposit rates after New Year's Day. In addition, some banks have raised their rates for certain deposit amounts. Among them, the highest rate increase by a bank reached 65 basis points. Industry insiders told Caixin reporters that small and medium-sized banks have limited ability to attract deposits compared to large banks. Considering the optimization of their liability structure, they may raise rates for some deposit terms. However, in the medium to long term, the overall trend of deposit rates is downward. The adjustment situations and magnitudes of different banks mainly depend on the banks themselves and the reference to the adjustment of rates by similar banks. 30BP, 40BP, 65BP... Many small and medium-sized banks raised deposit rates in January "The main adjustment this time is to adjust the fixed deposit rates," a staff member of Guangxi Lipu Rural Commercial Bank told Caixin reporters. According to the bank's announcement, the RMB deposit rates will be adjusted from January 2, 2025. The staff member introduced that the bank's 3-month, 6-month, 1-year, 2-year, 3-year, 5-year fixed deposit rates were raised from 0.8%, 1%, 1.1%, 1.2%, 1.5%, 1.55% to 1.2%, 1.45%, 1.55%, 1.85%, 1.85%, 1.85%. Regarding whether this adjustment is a pre-Spring Festival activity and the deadline for implementing the adjusted rates, the staff member of Guangxi Lipu Rural Commercial Bank told Caixin reporters, "This adjustment does not indicate an activity, it is just a rate adjustment made according to relevant arrangements." Guangxi Lipu Rural Commercial Bank is not the only one to raise deposit rates. Yiling Xingfu Village Bank adjusted its RMB deposit rates from January 1, 2025, with rates for 1-year and 2-year deposits (starting from 50 yuan) at 1.75% and 1.85% respectively, and rates for corresponding terms starting from 30,000 yuan at 1.86% and 1.96% respectively. Macheng Rural Commercial Bank stated that it adjusted its RMB deposit rates from January 1, 2025, with rates for 1-year and 2-year deposits (starting from 50 yuan) at 1.65% and 1.75% respectively, and rates for deposits starting from 50,000 yuan at 1.85% and 1.95% respectively. In fact, in the last month of 2024, several banks also raised rates for some deposit terms, with rate increases of up to 20BP. For example, in early December 2024, Xingyang Rural Commercial Bank announced an across-the-board increase in deposit rates, with a 3-year term rate reaching 2.05% with a minimum deposit amount of 10,000 yuan; furthermore, Yuzhou Rural Credit Cooperative also indicated an increase in deposit rates, with a 1-year term rate reaching up to 1.71%. Regarding the increase in deposit rates by some banks, Ai Yawen, an analyst at Rong360 Digital Technology Research Institute, told Caixin reporters that small and medium-sized banks have limited ability to attract deposits compared to large banks, and higher rates are beneficial for attracting depositors. Facing deposit-gathering pressure, small and medium-sized banks consider raising rates for some deposit terms to optimize their liability structure. "By temporarily raising rates for some deposit terms, banks can attract more medium- to long-term deposits, which can help reduce their dependence on short-term liabilities, lower liquidity risks, and improve deposit stability." Average deposit rates fell by 34BP in the first 11 months of 2024, with further downward potential in 2025 In fact, deposit rates have been on a clear downward trend in recent years. On October 18, 2024, the top six banks announced adjustments to their deposit rates. This was the second adjustment by state-owned large banks in 2024, and the sixth centralized downward adjustment of deposit rates since September 2022. While large banks have initiated a new round of downward adjustments in deposit rates, small and medium-sized banks have been following suit. Ai Yawen told Caixin reporters that the overall trend of deposit rates in 2024 shows a downward trend, which has been reflected at multiple points in time. According to data monitored by the research institute, in November 2024, the average 1-year fixed-term deposit rate for banks dropped to 1.562%, down 34.0BP from the beginning of the year; the average 2-year fixed-term deposit rate was 1.665%, down 45.7BP; and the average 3-year fixed-term deposit rate was 2.056%, down 47.8BP. "The downward trend of deposit rates in 2024 reflects the consistent policy orientation of the central bank in maintaining financial market stability. Although there have been temporary rate hikes by small and medium-sized banks at the end of 2024 and after New Year's Day, the long-term downward trend of deposit rates remains clear, which is in line with policy expectations and market conditions," industry insiders said. Ai Yawen mentioned that the logic behind the downward trend in deposit rates is mainly related to the macroeconomic environment, bank operating pressure, and policy orientation. Lowering deposit rates helps reduce the cost of corporate financing, promotes the flow of funds to key areas of the economy, and drives economic growth. The narrowing of net interest margins for banks is also a significant factor leading to the downward adjustment of deposit rates. Of course, the central bank is also adjusting through the LPR mechanism to encourage banks to lower loan and deposit rates to achieve the transmission effect of monetary policy to support the real economy. In Ai Yawen's view, based on recent policy trends and economic developments, there is still a possibility of further downward adjustment of deposit rates in 2025 to ensure market liquidity and support the continuous healthy development of the economy. With the improvement of the policy framework, the market-oriented adjustment mechanism for deposit rates will become more mature, giving banks greater flexibility in adjusting rates to respond to market changes. For investors, Ai Yawen suggests that if there are idle funds for investment, it is advisable to extend the investment period and choose products that can lock in medium- to long-term returns. Investors with a preference for stable and conservative investments can increase their equity investments to maintain and increase the value of their assets. However, before investing, it is important to clarify the scale of investable funds, the idle period of funds, the expected rate of return on investment, and the level of risk that can be tolerated. Diversifying investments as much as possible is also recommended.