The interest rate has been cut! The six major banks collectively lowered.

RMB deposit interest rate, lowered again!

On May 20th, official website, a big state-owned bank, updated the deposit interest rate table, RMB deposit interest rate table and listed interest rate table one after another to update the deposit interest rate. This interest rate adjustment will be implemented from May 20, 2025.

Among them, the demand interest rate is lowered by 5 basis points (BP) to 0.05%; The lump-sum deposit and withdrawal for three months, six months, one year and two years are all lowered by 15BP, which are 0.65%, 0.85%, 0.95% and 1.05% respectively; The three-year and five-year fixed lump-sum deposits and withdrawals are lowered by 25BP, which are 1.25% and 1.3% respectively. The three periods of fixed deposit and withdrawal, lump deposit and withdrawal, and deposit and interest withdrawal are all lowered by 15BP. The interest rate of 7-day notice deposit is lowered by 15BP to 0.3%.

ICBC:

Agricultural Bank:

Bank of China:

China Construction Bank:

Bank of Communications:

Postal savings bank:

The Head Stock Bank has followed up synchronously. At present, the official website savings deposit interest rate table of China Merchants Bank has been updated.

The last time a large state-owned bank lowered the interest rate on time deposits, it was in October 2024. At that time, the listing rates of three-month, six-month, one-year, two-year, three-year and five-year time deposits were all lowered by 25BP to 0.80%, 1.00%, 1.10%, 1.20%, 1.50% and 1.55%. The interest rate of 7-day call deposit decreased by 25BP to 0.45%, and that of 1-day call deposit decreased by 5BP to 0.10%.

It is worth noting that each round of deposit interest rate reduction is generally started by state-owned banks, followed by stock banks and local small and medium-sized banks. After the six major banks and China Merchants Bank took the lead in lowering the deposit interest rate, it is expected that more banks will follow suit.

For this deposit interest rate cut, the market has long expected. Earlier, Pan Gongsheng, governor of the central bank, announced at the press conference of the State Council Office on May 7 that the policy interest rate would be lowered by 0.1 percentage point. After the market-oriented interest rate transmission, it is expected that the quoted interest rate (LPR) in the loan market will be lowered by 0.1 percentage point. At the same time, it will also guide commercial banks to lower the deposit interest rate accordingly through the interest rate self-discipline mechanism.

Ming Ming, chief economist of CITIC Securities, pointed out in the research report that the market is likely to usher in the adjustment of deposit interest rate again in the second and third quarters of this year from the time law of deposit interest rate reduction. By combing the history of deposit interest rate reduction, the following three laws are summarized: first, the rhythm of interest rate reduction is often "big banks lead, small banks follow"; Second, regardless of lowering the self-discipline ceiling of deposit interest rate and suspending some high-interest products, we only observe the time when the deposit listing interest rate is adjusted, and the time interval varies from 3 to 9 months; Third, there are more and more ways to control the deposit interest rate. In addition to directly adjusting the deposit listing interest rate, it can also guide the bank’s debt cost to drop by restricting other high-interest deposits.

Source: China Fund.

Editor: Gillian