As the Spring Festival approaches, competition among banks in their "strong start" deposit campaigns has heated up once again. Statistics indicate that small and medium-sized banks are primarily attracting customers by raising interest rates on specific deposit products, with some rural commercial banks offering three-year deposit rates close to 2%. Although large banks have not directly increased rates, they have widely adopted methods such as offering points and instant cash rewards to join the deposit competition.
Behind what appears to be a routine "strong start" deposit drive lies the banking industry's anticipation and response to the flow of funds from maturing time deposits in 2026. While there has been market discussion about the possibility of deposits flowing into the stock market, multiple institutions and industry insiders point out that maturing funds are likely to remain circulating within the banking system, with a greater inclination toward low-risk assets such as wealth management products, money market funds, and insurance. In the current environment, banks are competing through pricing and services to lock in potentially mobile deposits in advance.
Zhong Linnan, a macro analyst at GF Securities, noted that household income expectations still face certain constraints, and capital preservation and appreciation remain the core demand for most depositors.
Small and medium-sized banks are adjusting interest rates, while large banks are offering incentives. As the Spring Festival nears, signs of intensifying deposit price wars among banks have emerged. According to incomplete statistics, since 2026, more than 10 small and medium-sized banks have periodically raised deposit rates. These increases mainly target specific deposit products, higher minimum deposit amounts, and terms of one to three years, with a focus on local small and medium-sized institutions such as rural commercial banks and village banks. Some products now offer rates nearing 2%.
For instance, in January, Hunan Xinhuang Rural Commercial Bank raised the three-year fixed deposit rate for amounts of 30,000 yuan and above to 1.75%, while one-year and three-year certificate of deposit rates were increased to 1.4% and 1.8%, respectively. Shaanxi Shangnan Rural Commercial Bank raised one-year and two-year deposit rates by 15 basis points each, to 1.15% and 1.2%. Ankang Rural Commercial Bank increased the maximum one-year and two-year fixed deposit rates by 25 and 15 basis points, respectively, to 1.25% and 1.2%, effective January 1. Shanxi Zezhou Rural Commercial Bank also announced rate hikes on January 14, setting one-year, two-year, and three-year rates at 1.45%, 1.5%, and 1.75%, respectively.
Meanwhile, some small and medium-sized banks that previously offered higher rates are still in the process of "reducing" rates. Xin'an Bank recently announced that, starting January 30, one-year, two-year, and three-year deposit rates would be cut by 20, 25, and 25 basis points, respectively, to 1.65%, 2%, and 1.95%.
Unlike small and medium-sized banks, which are directly raising rates, some large banks, while not increasing rates directly, are intensifying deposit collection efforts and improving retention rates through methods such as offering points and cash rewards. A customer manager at a state-owned bank in Shenzhen mentioned that clients who meet monthly average financial asset targets can receive corresponding WeChat cash rewards, with amounts increasing tier by tier—for example, 40 yuan for an increase of 50,000 to 100,000 yuan, and up to 5,000 yuan for an increase exceeding 6 million yuan. A customer manager at a branch of another state-owned bank in Jiangxi explained that depositing in one-year or longer fixed deposits earns points redeemable for gifts. An online channel of a joint-stock bank also launched promotions for new customers, offering 150 yuan in WeChat cash rewards for opening a card and depositing over 50,000 yuan in fixed deposits, along with points for asset increases redeemable for gifts.
The heating deposit competition reflects expectations regarding deposit mobility. The escalating competition may stem from a key judgment within the banking industry: a large portion of high-interest time deposits maturing in 2026 will likely remain within the banking system, making it necessary to use pricing strategies to capture these funds in advance. Market estimates of the scale of maturing time deposits in 2026 are abundant. For example, China International Capital Corporation (CICC) research indicates that maturing household time deposits in 2026 are projected to be around 75 trillion yuan, with about 67 trillion yuan from deposits with terms of one year or longer. This has led to narratives about potential asset reallocation, including flows into the stock market, or "deposit migration."
However, several industry insiders interviewed noted that interbank deposit circulation will likely remain the dominant trend, with most maturing funds in 2026 expected to stay within the banking system. In terms of growth, the increase in maturing time deposits in 2026 is not particularly striking. Based on financial reports from the six listed state-owned banks, the scale of maturing time deposits has hit new highs annually since 2022, with yearly increases ranging from 4 trillion to 7 trillion yuan. GF Securities estimates that the total scale of maturing time deposits in 2026 will be approximately 57 trillion to 60 trillion yuan, a year-on-year increase of 5 trillion to 8 trillion yuan.
A business professional from a state-owned bank remarked that peak deposit maturities occur every year, and while the scale in 2026 is larger, the increase is not substantial. Banks are currently more concerned about whether declining interest rates might lead to new fund flows. At the same time, overall household risk preference remains low. Central bank survey data also show a clear negative correlation between income confidence and savings willingness. Over the past two decades, five out of six cycles of declining household savings willingness were accompanied by a simultaneous recovery in income expectations.
GF Securities pointed out in a report that, based on January high-frequency data, newly established equity-focused fund shares have rebounded, but the magnitude remains unremarkable. The shrinking volume and lower prices of bank interbank certificates of deposit indicate relatively ample liabilities on bank balance sheets in January, suggesting that the retention rate for time deposits may be fairly high.
Referring to similar overseas phases, Zhong Linnan highlighted that Japan experienced a peak in time deposit maturities, low interest rates, and a rebound in risk assets between 1995 and 1996. During this period, one-to-two-year time deposit rates at Japanese banks fell from 2.3%–2.4% to 0.4%–0.7%, while the Nikkei 225 index rose by 55%. However, flow of funds data compiled by the Bank of Japan show that Japanese households significantly increased their holdings of low-risk assets such as cash, deposits, and insurance during this time, while reducing exposure to high-risk assets like stocks and funds. Mortgage prepayments also rose noticeably.
Deposit migration mainly flows to low-risk areas. After maturing within the banking system, funds, aside from being redeposited, primarily move into low-risk sectors. Drawing on overseas experience, a GF Securities report shows that during the period from the second quarter of 1995 to the second quarter of 1996, when the Nikkei index rose and deposit rates were low, Japanese household financial assets increased by 55.8 trillion yen. Of this, cash and deposits rose by 43.9 trillion yen, insurance by 20.2 trillion yen, while securities investment trust funds decreased by 441.4 billion yen and stock investments fell by 2.2 trillion yen.
Zhong Linnan believes that, even with low interest rates, a relatively stable portion of maturing household time deposits will continue to be allocated to time deposits, insurance, and other assets, or used for early mortgage repayment. From the perspective of early mortgage repayment, Zhong noted that existing mortgage rates above 3% are still significantly higher than yields on other low-risk assets, making early repayment a cost-effective "investment" choice for households. The declines in personal housing loans in 2023, 2024, and 2025 were 630 billion yuan, 490 billion yuan, and 670 billion yuan, respectively, indicating that households are continuously deleveraging through repayments.
However, there are differing views within the industry. Song Xuetao, chief economist at Sinolink Securities, suggested that the overlap between deposit holders and those prepaying mortgages may be limited, meaning deposit migration funds might not be used extensively for mortgage repayment. More opinions indicate that funds will flow into "deposit-like" low-risk products such as wealth management products and money market funds.
CICC noted in a recent report that the high growth in deposits from 2022 to 2023 was mainly due to reallocation from wealth management products, triggered by a rapid rise in bond market rates that led to net value declines and redemptions in a "negative feedback" loop. Thus, these "excess deposits" are similar in nature to wealth management products and are likely to be reallocated within low-risk preference assets.
Song Xuetao further analyzed that the primary destination for deposit migration is low-risk, "deposit-like" assets. Wealth management products and money market funds, with advantages like high liquidity, are likely to be the biggest beneficiaries of deposit migration. Insurance is an asset that households continue to increase allocations to, but its flexibility is lower, and it has previously had weaker links to deposits.
In terms of scale, bank wealth management products may become the main area absorbing migrating deposits. Song pointed out that, based on 2024 and 2025 figures, new individual wealth management scale in 2026 could continue at around 3 trillion yuan. Among these, low- and medium-risk wealth management products (mainly fixed-income products) are more favored by the market. In a low-interest-rate environment, to enhance returns, wealth management institutions have begun trying to expand the scale of higher-risk products, such as those containing equity components. However, data show that low- and medium-risk products remain the mainstream and their share is steadily increasing.
Supporting data from Sinolink Securities indicate that since 2022, the proportion of low- and medium-risk wealth management products (R1–R2) has risen from 83% to 96% by mid-2025, while the share of medium- and high-risk products (R3–R5) has declined from 17% to 4%.