On [date], multiple banks including the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China issued announcements that, starting from today, they will lower the benchmark interest rates for RMB deposits. Among them, the interest rate for demand deposits will be reduced by 5 basis points, from 0.25% to 0.20%; the interest rates for three-month, six-month, one-year, two-year, three-year, and five-year fixed deposits will all be reduced by 10 basis points. After the adjustment, the interest rate for one-year fixed deposits will be 1.55%.

Assuming a reduction in the three-year deposit interest rate, if one million yuan is deposited for three years, the interest earned over three years after the reduction is less. This marks the second time this year, less than four months after the previous reduction in June, that major commercial banks have lowered the RMB deposit interest rate. Looking back at the first round of nationwide commercial bank deposit interest rate cuts this year, it began on June 1st.

It is noteworthy that compared to the previous round of interest rate cuts, the reduction in the posted rates of fixed deposits this time is more significant. In the previous round, the reduction in the posted rates of fixed deposits varied according to the term. Industry insiders believe that this round of deposit rate cuts is still aimed at stabilizing the bank's interest margin and reducing the cost of liabilities. Following the usual path of deposit rate cuts, after the large state-owned banks take the lead in cutting rates, smaller banks follow in stages. It is expected that joint-stock banks will soon initiate deposit rate cuts.

There had been expectations in the market for another round of deposit interest rate cuts. Pan Gongsheng, Governor of the People's Bank of China, stated at a press conference held by the State Council Information Office on a certain day that the central bank would reduce its policy interest rates. The 7-day reverse repurchase operation rate was cut by 0.15 percentage points, from 2.00% to 1.85%. It was anticipated that the Loan Prime Rate, deposit interest rates, and others would also decrease by 0.1 to 0.2 percentage points. As two major policy interest rates, the current 7-day reverse repurchase operation rate has been reduced to 1.85%, and the 1-year rate has been lowered from 2.00% to 1.90%.

In addition, the reduction of existing mortgage rates will also be completed in bulk by the end of this month. Tao Ling, Deputy Governor of the People's Bank of China, stated at a press conference of the State Council Information Office that it is expected that the majority of existing mortgages will be adjusted in bulk on the 25th of this month, and the adjustment results can be viewed through designated channels of the lending banks on the 25th of this month. Some small and medium-sized banks will adjust slightly later, but the overall completion will be before the end of this month.

The data disclosed by the National Financial Regulatory Administration shows that by the end of the month, the net interest margin of China's commercial banks has dropped to .%, breaking through the .% threshold for the first time. A recent research report released by the Bank of China Research Institute points out that in recent years, due to the rapid decline in loan interest rates and the rigidity of deposit interest rates, the net interest margin in the banking industry has reached its historical lowest point.

The reduction in deposit interest rates is bound to have long-term ripple effects on residents' savings and investment behaviors. On one hand, some deposits may move to small and medium-sized financial institutions, but considering factors such as convenience and stability, the scale of this deposit transfer will not be significant. On the other hand, some deposits may also be diverted to the wealth management market, and the asset management industry is facing new changes. As more banks join the ranks of lowering deposit interest rates, it is expected that in the second half of the year, the scale of wealth management may continue to grow rapidly.