While the broader deposit rate environment trends downward and many lenders trim fixed deposit rates or pull long-dated products, a handful of private banks have recently moved against the grain.

According to reports, 微众银行 (WeBank) has raised its three-year fixed deposit rate by 15 basis points to 1.75%. Meanwhile, 网商银行 (MYbank) and 苏商银行 (Sushang Bank) have re-listed five-year deposit products that had been off the shelves for some time. Certain other private banks have also retained five-year deposit offerings with yields at the “2% level,” though these are typically reserved for select clients. Still, this round of changes has not sparked widespread industry-wide adoption, as most private banks remain committed to their existing rate strategies.

Industry insiders point out that these maneuvers are tactical, time-bound moves to attract deposits. They stem from individual banks’ considerations around upcoming deposit maturities and asset deployment schedules, rather than signaling any fundamental reversal of the downward deposit rate trajectory.

Where the adjustments stand

September has seen some private banks tweak their deposit offerings. For example, 微众银行 (WeBank) recently raised its three-year lump-sum deposit rate from 1.6% to 1.75%, an increase of 15 basis points. Its one, two, and five-year rates remain unchanged at 1.5%, 1.6%, and 1.6%, respectively. This follows an earlier period of rate cuts by the bank. In April 2025, it standardized rates across one, two, three, and five-year deposits to 1.6%, and also aligned six-month to three-year certificates of deposit at the same level. Prior to that shift, its two, three, and five-year rates had each been set at 2%. Since then, the two-year rate briefly rose to 1.7% before settling back to 1.6%.

Following the latest change, 微众银行 (WeBank) now pays more on three-year deposits than on five-year ones, creating an inverted yield curve. In a similar vein, 网商银行 (MYbank) and 苏商银行 (Sushang Bank) have re-introduced five-year deposit products at a rate of 1.8%. Other banks have adopted a more tailored approach by restricting access to higher-yielding five-year deposits. A client manager at 上海华瑞银行 (Shanghai Huarui Bank) noted that its five-year rate can reach 2%, but it is limited to certain customers and could be snapped up quickly due to quota constraints. An inspection of the bank’s app shows only a three-year product at 1.95% as its longest publicly available option, with no five-year offering on display.

Reasons behind the counter-move

What is motivating some private banks to raise rates or revive long-term deposits in this climate? 柏文喜 (Bai Wenxi), chief economist of the China Enterprise Capital Alliance, attributes the move to three main factors. First, as fixed deposits mature in concentrated waves, existing customers are less inclined to renew, putting pressure on banks to retain deposits. Second, with state-owned heavyweights relaunching long-dated certificates of deposit and pulling in funds, some mid-sized banks are using higher rates to shield themselves from the competition. Third, certain banks have particular needs tied to customer retention, business expansion, or long-term asset allocation that require a matching liability structure.

Adding to that analysis, 武泽伟 (Wu Zewei), a special researcher at 苏商银行 (Sushang Bank), previously pointed out that these phased rate increases are tactical responses to alleviate short-term liability pressures and stabilize deposit volumes in a climate of falling overall rates and intensifying competition.

Structural shift toward efficiency remains the trend

Even with the localised counter-moves this September, the broader trend among private banks still favours cutting deposit rates and tightening the availability of long-term deposit products. On the liability side, most private banks are actively working to reduce high-cost funding. In May, 北京中关村银行 (Beijing Zhongguancun Bank) announced it would suspend three-year lump-sum deposit services for both individuals and corporates. Its app now shows the three-year product removed and the two-year option sold out, with rates of 1.2%, 1.4%, 1.6%, and 1.8% for three-month, six-month, one-year, and two-year terms, respectively. Around the same time, 湖南三湘银行 (Hunan Sanxiang Bank) scrapped its five-year product and cut rates, leaving a three-year deposit at 1.95% as its longest available term. On August 28, 重庆富民银行 (Chongqing Fumin Bank) announced rate cuts that pushed most tenors below 2%, with the five-year rate dropping to 1.85%—lower than the three-year rate of 1.95%, another instance of an inverted curve.

According to 中信证券研究 (CITIC Securities Research), the removal of long-term deposit products by some banks is essentially a proactive move to shed high-cost liabilities and refine their liability structures, given the falling rate environment and persistent net interest margin pressure. Private banks often rely heavily on online channels and high-yield deposits to attract customers, which leaves them with weaker customer loyalty. When they lock in long-term funds at high prices, their cost of liabilities becomes more rigid, underscoring the need to adjust product offerings proactively. Pulling long-term deposits is thus a way to cut off expensive funding sources in advance and reduce the risk of further margin erosion.

Beyond the systemic drag of the rate-cutting cycle, the new rules on co-lending that took effect in October 2025 have further limited the space for private banks to deploy high-yield assets. These banks have historically leaned on co-lending platforms to expand their asset books, but under the new regulations, growth in internet loan businesses has slowed, and the pressure is migrating from the asset side to the liability side.

These headwinds are already showing up in financial results. Of the 10 private banks that have released their 2026 semi-annual reports, more than half posted year-on-year declines in net profit. For example, 中关村银行 (Zhongguancun Bank) saw revenue of 1.031 billion yuan, roughly flat year-on-year, but net profit of just 16.18 million yuan, a plunge of over 86%. 富民银行 (Fumin Bank) reported revenue of 1.553 billion yuan, up 12.7% year-on-year, yet net profit fell to 101 million yuan, down 68.92%. These figures underscore the earnings strain and urgency for transformation facing private banks.

袁帅 (Yuan Shuai), deputy secretary-general of the Zhongguancun IoT Industry Alliance, commented that the co-lending rules have fundamentally upended the old profit model, which relied on scale expansion and channel-based partnerships. To boost profitability, banks must first re-define their target clientele and core capabilities. Instead of chasing the entire customer universe, they should anchor on their shareholder backgrounds and local market niches, fostering deeper connections with specific segments. By replacing commoditised credit products with integrated financial services that better align with clients’ real business and daily needs, they can bring down deposit acquisition costs through stronger engagement while sharpening their risk pricing capability on the asset side.