2014-11-23

Deposit Competition Begins: Some Chinese Banks Hike Long Term Deposit Rates

Some Chinese banks are hiking their deposit rates under the new PBOC, with 3- and 5-year CD rates ticking up. Previously, the highest deposit rate was 110% of the benchmark, but now it is 120%. Since the rate cut was a smaller percentage farther out of the yield curve, this means banks could raise deposit rates. The official 3-year rate was cut from 4.25% to 4%; 110% of 4.25% is 4.675%, but 120% of 4% is 4.80%. At this time, only Bank of Nanjing and Bank of Ningbo are offering these rates.



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