Annualized 1.6%: State-owned large banks reintroduce 5-year large deposit certificates, what signal does this release? Industry insiders: Difficult to become mainstream.

In the past two years, mainstream state-owned banks and joint-stock banks have stopped issuing large-denomination certificates of deposit for terms longer than 3 years. However, just as the second half of the year begins, a state-owned bank has once again "restocked". On July 1, Bank of China announced on its official website that it will issue the first series of individual large-denomination certificates of deposit due in 2026, including seven terms of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, and 5 years. Since long-term large-denomination certificates of deposit issued by nationwide commercial banks have basically disappeared from the market. The issuance of large-denomination certificates of deposit by Bank of China this time also means that the 5-year large-denomination certificate of deposit product from state-owned banks reappears in the market. It is worth noting that the annualized interest rate of the large-denomination certificates of deposit issued by Bank of China this time is not low. Among them, the regular products for individual customers have annual interest rates of 1.55% for a 3-year term and 1.60% for a 5-year term. The 3-year term and 5-year term for individual customers are also as high as 1.50% and 1.55% respectively. Bank of China also clarified that all individual customers who open renminbi demand deposit accounts with the bank can purchase the product at the bank's business outlets, intelligent kiosks, or through online banking and mobile banking with their valid identity documents. The product uses electronic sales and can provide paper certificates of deposit, passbooks, and debit card transaction information. Today, the Caixin reporter found that most state-owned banks such as ICBC, ABC, BoC, CCB, CMBC, and PSBC had not posted information on the issuance of large-denomination certificates of deposit for 2026 on their official websites. However, Agricultural Bank of China had posted information on the issuance of multiple corporate and individual large-denomination certificates of deposit earlier this year and added 5 new individual large-denomination certificate products on July 1. However, the term of the large-denomination certificates of deposit issued by ABC this time is only 1 month, 3 months, 6 months, and 1 year, and there is no issuance of long-term large-denomination certificate products. ABC has not posted an announcement on the issuance of large-denomination certificates of deposit in the relevant news column on its official website. Industry insiders say it is surprising and unlikely to become mainstream in the future. Several bank executives told Caixin reporters that the reopening of long-term large-denomination certificates of deposit by state-owned banks is somewhat surprising. In recent years, due to pressure on net interest margins, banks have generally been inclined to control large-denomination certificates of deposit and long-term fixed-term products, especially for larger banks, who "are not lacking in liabilities". "Different banks have different considerations for issuing large-denomination certificates of deposit. Currently, the regulatory authorities have not prohibited long-term products, and banks can independently decide to issue them by following the relevant procedures," said a bank executive to the reporter. However, he pointed out that given the current interest rate environment, long-term large-denomination certificates of deposit are unlikely to become the industry mainstream. "In general, when banks anticipate a future interest rate hike, they tend to issue long-term large-denomination certificates of deposit or fixed terms to lock in customer deposits. On the other hand, they choose short-term products when they expect a decrease in interest rates," a banking analyst told reporters. Currently, the industry's mainstream judgment is that the current liquidity situation remains loose, and the probability of interest rate cuts is much higher than that of interest rate hikes. This article is reprinted from "Caixin". Editor: Liu Jiayin.