Why did the interest rate of fixed deposits fall overall
Our reporter Qian Qingni
Different from previous years, the fixed deposit interest rate in June this year ushered in an overall decline. According to statistics from third-party organizations, in June 2020, the average interest rate of lump sum deposit and withdrawal time deposits increased slightly from the previous month, and the average interest rates of other maturities all fell month-on-month. Among them, the average interest rates for the three-year and five-year periods fell significantly. .
Generally speaking, under the pressure of assessment at the end of the quarter and half of the year, banks tend to appropriately increase the interest rate of time deposits to attract savings. Why "not take the usual path" this year? "Affected by the new crown pneumonia epidemic this year, the broad-spectrum interest rate center has shifted downwards, covering up seasonal cyclical fluctuations." Feng Xuming, deputy director of the Comprehensive Economic Research Department of the Chinese Academy of Social Sciences, and ACCEPT researcher at Tsinghua University, was interviewed by a reporter from Economic Daily时 said.
Feng Xuming explained that due to the impact of the epidemic, various loan interest rates have been lowered. "This is part of financial support for the recovery of the real economy. In difficult times, banks counter-cyclical is necessary for companies to "give profits". However, the decline in loan interest rates will be transmitted to deposit rates, so as to avoid difficulties in bank asset and liability management." He said.
Huang Dazhi, a senior researcher at the Suning Institute of Financial Research, also said: “As the LPR is further reduced, banks need to further reduce the comprehensive loan interest rate, resulting in a narrowing of interest margins. Therefore, banks need to reduce debt-side costs and lower deposit interest rates. At the same time, it will increase. Banks’ comprehensive cost of structured deposits and interest-bearing products are subject to regulatory rectification, which has led to a decline in overall bank interest rates.”
Feng Xuming also said: “The impact of the epidemic on the financial system is relatively indirect, and it may take a quarter for non-performing loans to be reflected. It is expected that the accumulation of non-performing assets of banks will accelerate in the second half of the year. Banks need to take precautions, reduce debt costs, and enhance the digestion and disposal of non-performing assets. ability."
It is worth noting that, in addition to the decline in the interest rate of fixed deposits for ordinary customers, the decline in interest rates of structured deposits and money market funds in the first half of this year has been more pronounced. "In the first half of this year, the long-term interest rate for large-denomination certificates of deposit has fallen, and some large and medium-sized banks have removed the higher-cost 3-year large-denomination certificates of deposit. It is expected that the interest rates for large-denomination certificates of deposit will continue to fall." Rong360 Big Data Research Institute analyst Liu Yinping said.
"In the future, if loan interest rates fall further, the interest rates of various time deposit products will also show a downward trend. For large-amount certificate of deposit products, the yield will also show a certain downward trend due to the easing of funds." Huang Dazhi said.
Compared with loan interest rates, deposit interest rate pricing is relatively more sticky, and depositors are more sensitive to changes in deposit interest rates. Therefore, in general, the marketization of deposit interest rates is slower than loan interest rates. However, in the view of industry insiders, the marketization of deposit interest rates may accelerate in the future. Feng Xuming said: "First, the deposit pricing of financial institutions will be more free; second, banks will have more diversified competition methods for deposits, and deposits or deposit-like products will be more abundant; third, the linkage between deposit and loan interest rates will be strengthened. Considering short-term and mid- to long-term factors, deposit interest rates will still face downward pressure in the future."
However, the performance of different deposit products may vary. Among them, the rate of time deposit interest rate adjustment will be relatively small, and the rate of interest rate decline will be slower than other types of deposits. The short- and medium-term interest rates will not fall too much, but long-term interest rates will fall to a certain extent, especially for large and medium-sized banks. However, it is more difficult for small banks to collect deposits. They will lag behind large and medium-sized banks in terms of interest rate reduction, and small banks rely more on long-term deposits, and their long-term deposit rates are significantly higher than those of large and medium-sized banks.