Put the same amount of money in a deposit for five years, and the interest at maturity can differ by as much as 60%. Fujian Huatong Bank has set its five-year fixed-term deposit rate at 2.1%, compared with 1.3% at the six largest state-owned banks for the same term.
Over the past two years, people have grown used to deposit rates steadily falling. Now a group of smaller banks are moving in the opposite direction.
Not long ago, Sandu Fumin Village Bank announced that it had raised its three-year fixed-term deposit rate to 2% and its one-year rate to 1.75%. In late summer this year, Hubei Zaoyang Rural Commercial Bank added 15 basis points to its one-year rate, lifting it from 1.15% to 1.30%.
WeBank’s changes were more nuanced. It raised its three-year rate by 15 basis points, from 1.60% to 1.75%, while cutting its two-year rate from 1.70% to 1.60% in the very same announcement. One rate up, another down—all in one notice.
Wenzhou Bank also adjusted its rates in late July, with its top rates for three- and five-year deposits reaching 1.75%. A Peninsula Metropolis Daily reporter visiting Qingdao found that local banks were offering as much as 1.9% on five-year deposits.
Some banks are raising rates; others are holding steady. The six largest banks are standing pat, and joint-stock banks are mostly around 1.60%. The ones really pushing rates higher are city commercial banks, rural commercial banks, and privately owned banks.
Here’s the dilemma: net interest margins across the industry remain near historic lows, and banks are finding it harder and harder to make money. So why raise rates to compete for deposits now?
Fu Yifu, a special research fellow at SuShang Bank, describes it as “the big banks lead, and the smaller ones follow.” Since July, the state-owned giants have resumed issuing large-denomination certificates of deposit with longer terms, and smaller banks have followed suit. Wang Pengbo of Broadcom Consulting adds another factor: private banks have limited ways to reach customers and rely heavily on online deposits. Adjusting rates is the most direct way to attract funds, and most banks are keeping a lid on the scale rather than opening the floodgates to boost volumes.
Deposits are moving elsewhere. Money is flowing into wealth-management products and the stock market. Smaller banks lack an edge in brand recognition and branch networks, so they can only use rates to hold on to customers. And with assessments at the end of each quarter and year looming, they have little choice but to compete.
Now let’s turn to crypto. On the afternoon of October 17, something went wrong in the U.S. credit market. A flight to safety pushed spot gold to a record high, briefly topping $4,380 an ounce.
That same day, Bitcoin fell below $106,000, dropping more than 5% in 24 hours, while Ethereum fell more than 6%.
According to Coinglass, more than 280,000 traders were liquidated, with losses exceeding $1 billion.
My view is that the trigger for this downturn came from the credit side. Interest rates were just the backdrop.
As risk aversion rose, gold hit a record high while Bitcoin fell. In effect, the market used real money to classify Bitcoin as a risk asset, not a safe haven. Matthew Hougan, chief investment officer at Bitwise, has described crypto assets as “the canary in the coal mine”: the moment credit concerns emerge, they start fluttering. JPMorgan analysts attributed this wave of liquidations primarily to crypto-native investors, with institutions and ETF holders further down the list. There’s no deposit insurance on-chain and no one to bail you out, so when prices fall, liquidations can cascade.
Look back at that 2.1% rate. The yield is one thing; what lies beneath it is another. A bank’s 2.1% rate is backed by interest on loans—it earns a spread. High yields on-chain come from subsidies, leverage, and counterparty risk, all three of which can disappear at the same time when pressure hits.
I’m not sure whether this round of rate increases by smaller banks will spread into a broad-based rate hike. The big banks are also burdened by low net interest margins, and there’s no unified official position.
The next time you see the words “banks raise rates,” first find out which term and which bank it refers to. A targeted rate increase and a broad-based rate hike are two different things.
$BTC $ETH $USDC #银行存款利率 #宏观 #比特币 #以太坊 #stablecoin
Over the past two years, people have grown used to deposit rates steadily falling. Now a group of smaller banks are moving in the opposite direction.
Not long ago, Sandu Fumin Village Bank announced that it had raised its three-year fixed-term deposit rate to 2% and its one-year rate to 1.75%. In late summer this year, Hubei Zaoyang Rural Commercial Bank added 15 basis points to its one-year rate, lifting it from 1.15% to 1.30%.
WeBank’s changes were more nuanced. It raised its three-year rate by 15 basis points, from 1.60% to 1.75%, while cutting its two-year rate from 1.70% to 1.60% in the very same announcement. One rate up, another down—all in one notice.
Wenzhou Bank also adjusted its rates in late July, with its top rates for three- and five-year deposits reaching 1.75%. A Peninsula Metropolis Daily reporter visiting Qingdao found that local banks were offering as much as 1.9% on five-year deposits.
Some banks are raising rates; others are holding steady. The six largest banks are standing pat, and joint-stock banks are mostly around 1.60%. The ones really pushing rates higher are city commercial banks, rural commercial banks, and privately owned banks.
Here’s the dilemma: net interest margins across the industry remain near historic lows, and banks are finding it harder and harder to make money. So why raise rates to compete for deposits now?
Fu Yifu, a special research fellow at SuShang Bank, describes it as “the big banks lead, and the smaller ones follow.” Since July, the state-owned giants have resumed issuing large-denomination certificates of deposit with longer terms, and smaller banks have followed suit. Wang Pengbo of Broadcom Consulting adds another factor: private banks have limited ways to reach customers and rely heavily on online deposits. Adjusting rates is the most direct way to attract funds, and most banks are keeping a lid on the scale rather than opening the floodgates to boost volumes.
Deposits are moving elsewhere. Money is flowing into wealth-management products and the stock market. Smaller banks lack an edge in brand recognition and branch networks, so they can only use rates to hold on to customers. And with assessments at the end of each quarter and year looming, they have little choice but to compete.
Now let’s turn to crypto. On the afternoon of October 17, something went wrong in the U.S. credit market. A flight to safety pushed spot gold to a record high, briefly topping $4,380 an ounce.
That same day, Bitcoin fell below $106,000, dropping more than 5% in 24 hours, while Ethereum fell more than 6%.
According to Coinglass, more than 280,000 traders were liquidated, with losses exceeding $1 billion.
My view is that the trigger for this downturn came from the credit side. Interest rates were just the backdrop.
As risk aversion rose, gold hit a record high while Bitcoin fell. In effect, the market used real money to classify Bitcoin as a risk asset, not a safe haven. Matthew Hougan, chief investment officer at Bitwise, has described crypto assets as “the canary in the coal mine”: the moment credit concerns emerge, they start fluttering. JPMorgan analysts attributed this wave of liquidations primarily to crypto-native investors, with institutions and ETF holders further down the list. There’s no deposit insurance on-chain and no one to bail you out, so when prices fall, liquidations can cascade.
Look back at that 2.1% rate. The yield is one thing; what lies beneath it is another. A bank’s 2.1% rate is backed by interest on loans—it earns a spread. High yields on-chain come from subsidies, leverage, and counterparty risk, all three of which can disappear at the same time when pressure hits.
I’m not sure whether this round of rate increases by smaller banks will spread into a broad-based rate hike. The big banks are also burdened by low net interest margins, and there’s no unified official position.
The next time you see the words “banks raise rates,” first find out which term and which bank it refers to. A targeted rate increase and a broad-based rate hike are two different things.
$BTC $ETH $USDC #银行存款利率 #宏观 #比特币 #以太坊 #stablecoin