As 2026 begins, against a backdrop of major state-owned banks continuing to remove long-term deposit products and overall deposit rates entering the "1% era," a wave of "counter-trend rate hikes" initiated by numerous rural commercial banks is quietly spreading from regions like Guangxi, Guizhou, and Shaanxi. Some rural commercial banks have raised the annualized interest rates for their 1 to 3-year special deposit products, though most come with strict conditions such as a minimum deposit of 200,000 yuan, limited availability, and post-holiday deadlines.
However, this does not signal a reversal in the interest rate cycle. Data from the National Financial Regulatory Administration shows that by the end of the third quarter of 2025, the net interest margin for commercial banks had narrowed to a historic low of 1.42%.
A senior banking analyst pointed out that this seemingly contradictory "rate hike wave" is actually a calculated move by small and medium-sized banks caught between industry-wide profitability challenges and individual survival pressures. By employing a combined strategy of "high rates + high thresholds + short terms," they are launching a targeted campaign for large, short-term funds during the critical "strong start" window at the beginning of the year. In his view, this highlights the increasingly intense competition on the liability side among banks of different sizes and their divergent survival strategies.
The disparity in the deposit market at the start of 2026 is stark. On one hand, large banks continue to implement strategies to reduce long-term, high-cost deposits, with 1-year ordinary time deposit rates generally remaining below 1%, and 5-year large-denomination certificates of deposit (CDs) becoming scarce. On the other hand, numerous local rural commercial banks are intensively launching deposit products with raised interest rates, creating localized "high-rate zones."
Specifically, these "rate hike" operations are highly refined. For example, an announcement from Hunan Xinhuang Rural Commercial Bank shows that its 3-year lump-sum deposit and withdrawal rate has been raised to 1.75%, with a minimum deposit amount of 30,000 yuan (inclusive), available from January 16, 2026, and specifically noted as "first-come, first-served, until sold out."
Nanyue Rural Commercial Bank also announced on February 4 the launch of a "Strong Start Exclusive Rate" product. Among these, the interest rates for 3-month, 6-month, and 1-year time deposits are 1%, 1.2%, and 1.3% respectively, with a minimum deposit of 50 yuan; the rates for 3-month, 6-month, and 1-year large-denomination CD products are 1.1%, 1.3%, and 1.4% respectively, with a minimum deposit of 200,000 yuan. It is important to note that the official poster specifically marked the normal rates for similar products. Compared to the "normal rates," the relevant products from Nanyue Rural Commercial Bank have rates raised by 20 basis points. Below the large-denomination CD section on the poster, it is marked with "Limited quota, first-come, first-served."
It was noted that Shanxi Linxian Rural Commercial Bank officially stated it has "significantly raised deposit rates," with its 1-year time deposit rate at 1.25% and its 3-year time deposit rate at 1.55%.
A senior banking analyst explained in an interview that this combination of "high interest rates + high thresholds + short time limits" is a calculated marketing strategy by small and medium-sized banks under severe liability-side pressure. The core goal is not to comprehensively raise overall liability costs, but to precisely attract large, short-term idle funds from local customers at the lowest possible cost during the critical period around the Spring Festival when depositor funds are concentrated and banks face "strong start" deposit assessments.
"For small and medium-sized banks with limited branches and relatively weak brand influence, their deposit base is their lifeline," the analyst pointed out. During the window when large bank rates are unattractive, using phased, targeted rate increases to stabilize or even expand core liabilities is the most direct and effective method. In essence, this reflects the differentiated positioning and competitive strategies of banks with different endowments in the market.
The seemingly "counter-trend" operations by small and medium-sized banks occur against the backdrop of profitability pressures facing the entire banking industry. Data from the National Financial Regulatory Administration shows that by the end of the third quarter of 2025, the net interest margin for Chinese commercial banks had narrowed to 1.42%. This figure is not only at a historical low but also significantly below the regulatory comfort level of 1.8%. The continued narrowing of the interest margin is mainly due to a dual squeeze from "declining loan rates on the asset side" and "relatively rigid deposit costs on the liability side."
The aforementioned analyst interpreted this, stating that the current interest margin pressure in the banking industry is systemic. Under the policy direction of supporting the real economy and the overall downward trend in loan rates, banks' asset returns continue to decline. If liability costs cannot be effectively reduced in sync, the risk of inverted deposit and loan rates for certain maturities and customer segments could become a reality.
"Therefore, from an industry-wide perspective, reducing high-interest deposits and controlling liability costs is an inevitable and consistent strategic direction. This is precisely the fundamental logic behind large banks continuously optimizing their deposit structures and removing long-term products," he believes.
However, under this consistent strategic direction, the tactical options for different banks vary greatly. The analyst further analyzed that large banks, leveraging their vast customer base, extensive branch networks, and strong brand credibility, have a natural "ballast" advantage in the deposit market. Their liability sources are more stable, and they rely less on attracting deposits through high interest rates.
In contrast, numerous rural commercial banks rooted in counties have a relatively localized and fixed customer base. Under financial disintermediation and peer competition, the pressure of deposit diversion is more urgent. When the "strong start" period coincides with a large number of maturing deposits being rolled over, using measured rate increases to prevent deposit outflows becomes a necessary survival choice. This reflects the significant divergence in resilience and behavioral logic among different market participants under the industry-wide "tight curse" of a 1.42% net interest margin.
Despite localized market rate increases,综合分析政策导向、行业盈利压力及宏观经济环境，存款利率的长期下行趋势依然明确。当前中小银行的“加息”行为，更应被视为一种特定时间窗口的短期营销现象，而非长期趋势的拐点。
The 2026 People's Bank of China Work Conference outlined key annual tasks,明确今年将继续实施适度宽松的货币政策，灵活高效运用降准降息等多种货币政策工具，保持流动性合理充裕。
The aforementioned analyst predicts that for the entirety of 2026, deposit rates remaining "stable with a slight downward trend" will still be the basic direction. The core basis for this is: First, to consolidate the economic recovery and upward trend, a prudent and slightly accommodative monetary policy stance is expected to continue, making a trend-like rise in the market's risk-free rate center difficult, which provides a macro-environment conducive to lower deposit rates. Second, from the banks' own perspective, under the pressure of a 1.42% net interest margin, the endogenous motivation within the banking system to stabilize margins by reducing liability costs is extremely strong. Once the special "strong start" period passes and the phased marketing activities end, these raised-rate products are likely to be withdrawn quickly.
The analyst emphasized that from a longer-term perspective, the transformation of the liability structure of China's banking industry is imperative. Relying solely on "price wars" to compete for deposits is unsustainable and runs counter to the direction of interest rate marketization reform and benefiting the real economy. Future competition will focus more on enhancing comprehensive financial service capabilities, improving customer experience, and innovating deposit product forms (such as integrating with wealth management) to increase customer stickiness, thereby building core liabilities in a healthier and more sustainable manner.
For small and medium-sized banks, the fundamental way to cope with industry changes and achieve high-quality development lies in how to leverage their localized, community-based advantages to create a service ecosystem that is difficult to replicate, rather than relying solely on the single tool of interest rates.