Jiemian News, an online outlet under Shanghai United Media Group, recently reported that Chinese banks are accelerating efforts to shorten the maturity of their liabilities at an unprecedented pace. This shift has led to a rare development in the financial market: five-year fixed deposits—long regarded as a cornerstone savings product—are quietly disappearing from the product lists of numerous banks, including China’s six major state-owned lenders. Even three-year fixed-deposit products have begun to vanish.
The withdrawal of five-year deposits began with small and medium-sized banks. Rather than isolated incidents, the trend has shown signs of multiple outbreaks and gradual spread across the sector. According to incomplete statistics, since October 2025, more than seven small and medium-sized banks in Inner Mongolia, Guangdong, Beijing, and other regions have removed their five-year fixed-deposit offerings.
Analysts say the primary driver behind this shift is the widespread expectation of further interest-rate declines. To better manage risk and reduce the cost of long-term liabilities, many banks are adjusting their deposit-gathering strategies. The underlying pressure comes from the shrinking net interest margin (NIM)—a key profitability indicator for banks.
The industry generally considers a 1.8 percent NIM to be the minimum safe level for stable operations. However, the average NIM of Chinese banks has already fallen below 1.5 percent. Large state-owned commercial banks are seeing NIMs as low as 1.31 percent, with some major lenders dropping to 1.21 percent.
Sources:
(1) Jiemian, November 24, 2025
https://www.jiemian.com/article/13674700.html
(2) STCN, November 28, 2025
https://www.stcn.com/article/detail/3517404.html