On October 22, according to Caishilien News (Reporter Shi Sitong), with the recent wave of deposit benchmark interest rate reductions, some banks have also adjusted certain special deposit products. On October 22, Bank of Beijing lowered the deposit benchmark interest rates, while also simultaneously reducing the two-year fixed wisdom gain product rates at the bank.

Specifically, in this adjustment, Bank of Beijing has reduced the benchmark interest rates for fixed deposits from three months to five years by 25 basis points for each term. Among them, the two-year fixed deposit benchmark interest rate and the same-term fixed wisdom gain product rate at the bank both decreased from 1.7% to 1.45%.

It is worth mentioning that Bank of Beijing had already closed the signing function of the fixed wisdom gain product through various channels in December 2019. Currently, only customers who had already activated this service can use it normally. However, amidst the recent six rounds of interest rate cuts, Bank of Beijing continues to actively adjust the rates of this product.

In the view of industry insiders, Bank of Beijing's adjustments this time are a follow-up to the recent new round of deposit rate cuts initiated by state-owned major banks a few days earlier. The speed of medium and small banks in reducing deposit rates has significantly accelerated in recent rounds, and the adjustments made by Bank of Beijing to related deposit product rates mainly follow policy guidance to further optimize the deposit structure. Subsequently, medium and small banks are expected to gradually follow suit, with rates of related special deposit products also set to decrease accordingly.

The rates for discontinued services continue to decline, with the two-year fixed wisdom gain rate dropping to 1.45%.

"Starting from October 22, 2024, China Everbright Bank announced that the RMB two-year fixed wisdom gain product rate will be 1.45% per annum."

According to the customer service at Bank of Beijing, the fixed wisdom gain product is a Renminbi deposit product that includes self-generated, automatic early withdrawal functions in addition to regular fixed deposit features, with interest calculated based on the Renminbi current deposit benchmark rate on the early withdrawal date.

However, currently, Bank of Beijing's Dinghuiying product can no longer be newly purchased. 'Due to business adjustments, our bank has closed the signing function of the Dinghuiying product through various channels since December 26, 2019. Customers who have already activated Dinghuiying can continue to use it,' the customer service said.

Financial Union News reporters noticed that even though this product has long been discontinued, in recent years, Bank of Beijing has continued to adjust its interest rates continuously.

The official website shows that since October 2022, Bank of Beijing has announced at least 6 times the reduction of interest rates for the Dinghuiying product. In October of that year, the 2-year Dinghuiying product rate was adjusted to an annual rate of 2.40%, and after 5 more adjustments, it has now dropped to 1.45%.

In the view of Zhou Maohua, a macro researcher at China Everbright Bank's Financial Markets Division, although the above-mentioned product has been discontinued, some existing customers can still continue to use it. As deposit rates continue to decline, Bank of Beijing also needs to adjust the rates for this product. This rate adjustment is a follow-up action to the recent round of deposit rate cuts led by large state-owned banks.

Since the establishment of the market-oriented adjustment mechanism for deposit rates in April 2022, deposit rate cuts led by large state-owned banks have undergone six rounds, in September 2022 and June, September, December 2023, and July, October 2024. By comparison, Bank of Beijing's adjustments to the Dinghuiying product rates also coincide with the dates mentioned above.

Deposit rates are being simultaneously lowered, accelerating the transmission speed of the 'interest rate cut' trend.

In fact, just a short while ago on October 18, the six major state-owned banks synchronously lowered their deposit listed rates, once again triggering a new round of 'interest rate cuts.' Subsequently, major joint-stock banks quickly followed suit, and today Bank of Beijing disclosed the latest RMB savings deposit rate chart, along with adjustments to the 2-year Dinghuiying product rate.

Currently, Bank of Beijing has lowered the interest rates for three months, six months, one year, two years, three years, and five years fixed-term deposit listed rates by 25 basis points to 0.85%, 1.10%, 1.30%, 1.45%, 1.55%, 1.60%, respectively. Among them, the bank's two-year fixed deposit listed rate is at the same level as the aforementioned Dinghuiying product rates for the same term.

"Compared to before, the speed of deposit rate reduction by small and medium-sized banks has significantly accelerated in the past two rounds. Bank of Beijing quickly responded by lowering the rates of relevant deposit products, mainly to comply with policy guidance and optimize the deposit structure," said Wang Pengbo, Chief Analyst of Broadcom Financial Consultancy.

In his view, on one hand, lowering deposit rates can encourage funds to flow from the banking system to the real economy and capital markets, stimulating corporate investment and consumer spending, helping drive economic recovery and growth. On the other hand, given the greater downward pressure on loan interest rates and the decrease in asset yields, it is beneficial for banks to optimize their deposit structure, alleviate the current trend of deposit term-ification and pursuit of high interest rates, and maintain stable net interest margins.

At the same time, Zhou Maohua further pointed out that there is a structural imbalance in the deposit market at present. Recently, the six major banks reduced their deposit benchmark rates, indicating the beginning of a new round of bank deposit rate cuts. Subsequently, major joint-stock banks and certain city and rural commercial banks like Bank of Beijing quickly followed suit, further accelerating the efficiency of this round of adjustments.

Looking ahead, Zhou Maohua believes that small and medium-sized banks are expected to follow suit in succession to reduce deposit benchmark rates. Additionally, in the face of the new round of interest rate cuts, future rates of special deposit products with relatively high interest rates at banks will also be adjusted accordingly.