On August 7th, 2026, the Zaoyang Rural Commercial Bank in Hubei Province announced that it would be increasing the interest rates of several deposit products, including those with a three-year term. The highest increase reaches up to 20 basis points. Recently, numerous small and medium-sized banks in provinces such as Hubei and Guangdong have been raising their deposit rates. However, industry insiders indicate that interest rate cuts are still the mainstream trend in the banking sector.
According to a report from Caixin on August 7th, the Zaoyang Rural Commercial Bank issued an announcement regarding the adjustment of deposit rates through its official WeChat account. This time, the bank raised the rates of 6 deposit products ranging from 50,000 to 200,000 yuan, with varying terms from one to three years.
In addition to the Zaoyang Rural Commercial Bank in Hubei, several local rural commercial banks in provinces like Hubei, such as Gucheng Rural Commercial Bank, Baokang Rural Commercial Bank, and Yicheng Rural Commercial Bank, have also announced similar increases in some of their deposit product rates, with the highest rate rising by 20 basis points.
The Wuhua Huimin Village Bank in Guangdong issued a notice on August 4th through its WeChat account, stating that it would adjust the interest rates for Renminbi deposits starting on August 5th. The new benchmark rates are as follows: 1.58% for a three-year fixed-term private deposit and 1.28% for a two-year fixed-term private deposit, representing a maximum increase of 33 basis points compared to rates in April.
Prior to this, Bank of China, Agricultural Bank of China, and China Construction Bank reintroduced a five-year 200,000 yuan large-denomination certificate of deposit. According to a report from the First Financial on July 20th, Bank of China launched the first tranche of individual large-denomination certificates of deposit in 2026, covering periods from one month to five years. The five-year large-denomination certificate starts at 200,000 yuan with a maximum annual interest rate of 1.60%. On July 8th, Agricultural Bank of China issued a five-year 200,000 yuan individual large-denomination certificate with an annual interest rate of 1.60%. On July 10th, China Construction Bank launched two five-year 200,000 yuan individual large-denomination certificates with annual interest rates of 1.55% and 1.60%.
Following this, joint-stock commercial banks such as Huaxia Bank and Minsheng Bank also introduced large-denomination certificates of deposit starting at 200,000 yuan with annual interest rates ranging from 1.75% to 1.80%.
Regarding the reintroduction of large-denomination certificates of deposit to the market, Dong Ximiao, Chief Economist of Zhonglian, believes that restarting the five-year large-denomination certificates is a direct method for banks to attract existing funds and alleviate deposit outflows.
Dong Ximiao previously analyzed that small and medium-sized banks with weak brand influence and a single customer acquisition channel may be forced to follow suit and issue similar long-term large-denomination certificates to prevent deposits from being redirected to larger banks.
The recent increase in deposit rates by various small and medium-sized banks in Hubei and Guangdong provinces echoes Dong Ximiao’s predictions.
A source from a listed bank told Caixin that the recent increase in rates for certain deposit products by small and medium-sized banks in Hubei and other regions is essentially a form of self-rescue amid the ongoing downward pressure from larger banks. “Deposit rates at small and medium-sized banks have historically been higher than those at large and joint-stock banks,” they said. “In addition, it cannot be ruled out that many banks may reintroduce higher-rate long-term large-denomination certificates and fixed deposit products in the near future, which would have a ripple effect on some small and medium-sized banks.”
A banking industry analyst stated that despite the current “rate hikes” by some small and medium-sized banks in provinces like Hubei, continuous rate cuts by small and medium-sized banks nationwide over the past two years remain the prevailing trend.
Dong Ximiao also believes that the current net interest margin of banks has dropped to a historical low of 1.40%, and extending the duration of deposits will exacerbate the pressure on debt costs, with the industry-wide trend of shortening deposit terms by the end of 2025 showing no signs of reversal.