By the midsummer of 2024, the banking industry has once again become the focus of attention in all sectors of society. The continuous reduction in deposit interest rates, like an irresistible tide, has quietly affected the financial planning of thousands of households. Especially in the prelude to August, the six major state-owned banks, together with many joint-stock banks, have jointly opened a new round of interest rate cuts, injecting new vitality and challenges into the current economic landscape.

The tide of interest rate cuts by state-owned banks is surging

At the end of July, the Industrial and Commercial Bank of China, the China Construction Bank, and other six major state-owned banks have successively announced a reduction in RMB deposit interest rates, especially the decline in medium and long-term fixed deposits is eye-catching. This move is undoubtedly a positive response to the current loose monetary policy and also indicates that bank deposit interest rates are about to enter a more relaxed new stage. Short-term deposit interest rates have approached historical lows, and the reduction in medium and long-term deposit interest rates has made the once "easy money" days gone forever. Depositors have to re-examine their financial strategies.

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Joint-stock banks follow suit

Led by state-owned banks, joint-stock banks such as China Merchants Bank and Ping An Bank are not lagging behind, and have joined the ranks of interest rate cuts, forming a "domino effect" of interest rate cuts within the banking industry. It is worth noting that although the overall trend is downward, some joint-stock banks still offer relatively high deposit interest rates at specific times, such as Bohai Bank and China Zheshang Bank. These highlights have become a clear stream in the market, attracting the attention of many investors. However, overall, interest rate cuts have become a foregone conclusion, and the banking industry is gradually entering a brand-new interest rate environment.

Market response and policy logic

Faced with the continuous decline in deposit interest rates, the market response is sensitive and diverse. Large-denomination certificates of deposit have become popular due to their relatively high interest rates and have become a hot product that depositors are competing to buy. This phenomenon not only highlights the depositors' high regard for the safety of funds but also reveals a cautious prediction of future interest rate trends. At the same time, some funds have begun to flow into the financial product market, seeking higher returns. With the recovery of the bond market and the increase in the expected return rate of financial products, the financial market has once again shown a vigorous vitality.

From a policy perspective, the bank's interest rate cuts are an important part of the country's macro-control policy. Against the background of the difficult recovery of the global economy and the downward pressure on the domestic economy, reducing financing costs and stimulating investment and consumption vitality have become the key to policy regulation. The reduction in bank deposit interest rates is a direct reflection of this policy orientation. In addition, the government is also actively guiding financial institutions to optimize the asset allocation structure and enhance their ability to serve the real economy, injecting more momentum into economic development.

As an observer and analyst in the financial field, I believe that the current wave of interest rate cuts is a challenge and opportunity coexist. For depositors, although deposit returns have decreased, this has also prompted everyone to pay more attention to the safety of assets and the importance of diversified allocation. For financial institutions, interest rate cuts mean the need to continuously innovate product and service models to cope with market changes. At the same time, I call on the government to continue to strengthen supervision and guidance to ensure the stable and healthy development of the financial market.

Looking forward to the future, as the macroeconomic situation continues to evolve and policies continue to adjust, the trend of bank deposit interest rates will still be full of variables. However, no matter how the market changes, we should maintain a clear mind and a rational attitude, and make reasonable asset allocation decisions based on our own risk tolerance and investment objectives. In this era where challenges and opportunities coexist, only by being flexible and moving steadily can we seize the future and win a broader development space.