Interest rate cuts prompt investors to urgently seek deposit substitutes, with short-term wealth management becoming a new favorite.

After state-owned banks and China Merchants Bank took the lead in cutting interest rates, 8 other joint-stock banks announced on May 21st that they would also be lowering deposit rates. The rates for 3-year and 5-year fixed-term deposits were reduced by 25 basis points, and the rates for current deposits approached zero. At the same time, many banks simultaneously lowered the rates for large-denomination certificates of deposit, ushering in the era of "1". The new round of interest rate cuts has already begun, how will this affect the wealth management market? Industry insiders believe that this will further trigger the phenomenon of "deposit migration", and the substitution effect of deposits in the wealth management market will also be significantly enhanced, especially for short-term wealth management products which will become the main tool for fund attraction. However, as deposit rates are lowered, the yields of bank wealth management products and other fixed-income products will also face downward pressure.