The one-year deposit interest rate has officially dropped below 1%, reaching 0.95%.

According to statistics, the interest rates for 5-year fixed deposits have dropped by 135 basis points in the past two years, with rates for multiple terms falling below 1%. On May 20, state-owned banks took the lead, with 1-year deposit rates dropping to 0.95%. 9 joint-stock banks followed suit, such as Ping An, CITIC, and Industrial Bank, all lowering their rates. Medium to long-term rates saw significant drops, with 3-year and 5-year terms decreasing by 25 basis points. Some banks have even stopped offering 5-year fixed deposits. Large-sum certificates of deposit have also been adjusted downward, with Bank of China selling 1-month and 3-month products with rates at 0.9% on May 20, and other terms also seeing reductions. Industrial and Agricultural Bank, as well as some small and medium-sized banks, have also made adjustments. Why are rates dropping so sharply? This is because the net interest margin of commercial banks is close to the red line, at only 1.43% in the first quarter of 2025. Lowering interest rates can save costs, but attracting deposits has become difficult as funds are going into wealth management products, leading to a rapid increase in deposit migration. Data from PuYi shows that the total size of bank wealth management products rebounded to 31 trillion yuan in April, almost reaching a historical high, with an increase of 1.6 trillion yuan since the beginning of the year.