Another round of deposit interest rate cuts is coming, with a maximum reduction of 35 basis points.

By the end of March and in early April, multiple banks successively issued announcements stating that they would cut the posted rates on certain term deposits. This round of adjustments covers almost all long-, medium-, and short-term categories, with a maximum reduction of 35 basis points. Some banks reduced certain products twice within a week.

Effective April 1, Xiamen Bank lowered the posted rates for personal one-day and seven-day notice deposits by 5 basis points each, bringing them down to annualized 0.6% and 0.9%, respectively. At the same time, the reductions for corporate notice deposits were larger for the one-day and seven-day tenors: down by 30 basis points and 35 basis points, respectively, to annualized 0.35% and 0.6%.

Previously, the bank had already lowered deposit rates once. On March 27, Xiamen Bank reduced the posted rates for personal one-year, three-year, five-year time deposits and one-day notice deposits by 10 basis points, 20 basis points, 20 basis points, and 5 basis points, respectively. Combined with this latest round, the deposit product rates at the bank have come close to across-the-board cuts. Among them, the posted rate for personal one-day notice deposits was cut twice within less than a week, for a cumulative reduction of 10 basis points.

On April 1, Jilin Bank issued an announcement to adjust its RMB deposit posted rates, applying only to three-year time-deposit products. The rate was lowered from an annualized 1.75% to 1.70%, a reduction of 5 basis points. After the adjustment, the inverted spread between the bank’s three-year and five-year time-deposit rates narrowed from 15 basis points to 10 basis points. Xishang Bank also, starting April 1, adjusted certain deposit rates on its mobile banking. The rates for three-year and five-year time deposits were both set to 1.8%, down by 20 basis points compared with the current rates.

In addition, Shandong Chiping Hu-nong Commercial Rural Township Bank, Yunnan Yuanjiang Beiyin Commercial Rural Township Bank, Xinjiang Bank, Shanghai Songjiang Fujiming Commercial Rural Township Bank, Heilongjiang Friendship Rural Commercial Bank, and others all lowered their deposit posted rates in late March. The adjustment targets are mainly long-term fixed-term deposits, with the reductions ranging from 5 basis points to 30 basis points.

With short-term deposit product rates being cut in a concentrated manner, industry insiders generally believe that at the beginning of the year, banks suppressed the downward trend in deposit rates in order to “kick off the season with strong growth” . As the drive period concludes, the industry is returning to normalized interest-rate management, and the pace of deposit rate adjustments will gradually resume. Against the backdrop of sustained declines in loan rates and pressure on asset yields, lowering deposit rates is an important way for the banking industry to ease net interest margin pressure.

Data on the main regulatory indicators for the banking industry in the 2025 fourth quarter released by the National Financial Regulatory Administration show that, as of the end of the 2025 fourth quarter, commercial banks’ net interest margin was 1.42%, unchanged from the end of the third quarter and the end of the second quarter. By institution type, city commercial banks and rural commercial banks had net interest margins of 1.37% and 1.60%, respectively. With net interest margins operating at low levels for an extended period, combined with the loan prime rate (LPR) remaining low, cost-control pressure on the banks’ liability side is further intensified.

As time-deposit rates are gradually lowered, if savers have some extra cash, will they still keep depositing? Dong Ximiao, chief researcher at Zhaolian, believes that as deposit rates continue to fall and the yields of wealth-management products decline, along with improving household expectations, the appeal of the wealth-management market and capital markets may be further enhanced. More funds may flow into the stock market and the real-estate market. Investors should adjust their investment mindset as soon as possible, and reduce expectations for investment returns.

Overall, investors should balance risk and return, as well as the relationship between short term and long term, to conduct comprehensive asset allocation. If investors want higher returns, they must assume higher risk. If they do not want to take on higher risk, they should accept lower returns. Investors seeking stable returns can, in addition to deposits, reasonably allocate to cash-management-type wealth-management products, money market funds, and products such as treasury bonds and insurance. Dong Ximiao judges that over the coming period, banks may still lower deposit rates. Therefore, investors may appropriately choose time deposits with longer terms at present to lock in relatively higher deposit rates. At the same time, it is recommended that investors dynamically adjust the proportion of deposits according to their own risk tolerance to avoid having returns shrink due to over-reliance on a single source of deposits.

Image source: Visual China