The hunt for high-yield deposits grows increasingly difficult.
"Five years ago, I bought a high-rate certificate of deposit (CD) as a New Year promotion, and now it’s about to mature—I really don’t know what to do next," said Wang Yan, a designer based in Shenzhen, who has been scouring various channels for high-interest deposit options.
At the end of 2020, Wang deposited 300,000 yuan in a five-year CD at a joint-stock bank with an annualized interest rate of 3.5%. Recently, his relationship manager informed him that the CD is nearing maturity. However, five-year CDs have largely disappeared from the market, and even two-year CDs now offer rates as low as 1.4%. A quick calculation reveals a stark contrast: his previous annual interest of about 10,500 yuan has dwindled to roughly 4,200 yuan—a drop of more than half.
Wang’s situation is far from unique. Between 2022 and 2023, many banks aggressively issued two- to three-year CDs with rates around 3%, attracting a wave of young depositors. From December this year to March next year, these high-yield deposits will mature in bulk, but the market has changed dramatically. Five-year CDs, once highly sought after, have nearly vanished from major state-owned and joint-stock banks.
Faced with this shift, depositors are reevaluating their options—some are turning to insurance products with slightly higher guaranteed returns, others are eyeing bank stocks with dividend yields exceeding 5%, while some are allocating funds to gold or bonds in an effort to preserve returns in a low-rate environment.
**Over 100 Trillion Yuan in Maturities by 2026** With three-year deposit rates now below 1.5% and five-year CDs almost extinct, young depositors who once viewed banks as "safes" for their wealth are realizing a harsh reality: money can no longer simply sit in banks.
Wang recently noticed that the once-abundant CD options in his mobile banking app are mostly marked "sold out." Five-year CDs are widely unavailable, and rates have retreated to below 1.55%. Even small and private banks rarely offer CDs above 2%.
His relationship manager suggested he visit a branch to discuss "New Year promotion" products—claiming they offer principal protection and returns around 3%. At the branch, Wang learned these were not deposits but insurance products. The manager explained that, unlike previous years when banks promoted limited-time high-rate deposits, this year’s focus is on insurance, some of which provide guaranteed returns that appear more attractive than current deposit rates.
After hesitation, Wang allocated half his funds to insurance and the other half to a bank deposit. "It doesn’t feel entirely secure," he thought upon leaving, "but there aren’t better alternatives."
Li An was among those who caught the tail end of high-yield deposits in 2022. As rates began declining, he scoured the market like a detective and eventually found a "group deposit" at a city commercial bank offering 3.25% annually. For three years, he took comfort in the steady returns. But now, that security is expiring.
Before maturity, he considered another private bank offering 2.5% for three-year deposits, but rates were cut twice in three months, dropping below 2%. "At this level, the interest hardly matters," Li said.
This time, he shifted strategy, turning to bank stocks with dividend yields above 5%. In May, he also used another matured deposit to buy gold—not ETFs or accumulation plans, but physical bars from Shenzhen’s Shuibei market. "Physical gold is a long-term hedge against inflation," he explained, adding that the bars could later be crafted into jewelry if needed. Looking back, he considers this move "a step in the right direction."
**No Perfect Substitute** Analysts note that from December to March next year, a wave of two- to three-year high-yield deposits issued in 2022–2023 will mature. With rates now significantly lower, the trend of "deposit migration" will persist—but finding a perfect replacement is challenging.
Wang knows his insurance purchase isn’t a true substitute for his old CD. While projected returns may exceed 3%, the contract’s guaranteed rate is barely above 1%, with the rest tied to market performance. He briefly considered Hong Kong insurance but dismissed it after crunching the numbers. "The guaranteed returns aren’t high, and the projected figures are optimistic at best," he said, noting practical hurdles like fund accessibility.
A relationship manager at a state-owned bank revealed that savings-type insurance products are popular precisely because depositors hope to lock in long-term guaranteed rates amid declining yields. However, even universal insurance products now guarantee only about 1.5%.
One late night, Li closed his spreadsheet comparing financial products and opened a stock trading app. Bank stocks with consistent 5%+ dividend yields caught his eye. After反复 calculations, he realized the dividends alone could cover his monthly commuting and lunch expenses.
Still, accustomed to the safety of deposits, Li only allocated 10% of his funds to dividend stocks, spreading the rest across bond funds, low-risk wealth products, and gold, aiming for an overall 3%+ annual return. Reality proved less smooth: bank stocks fluctuated, and his tech stock picks dipped, leaving his year-to-date return below 3%.
Most depositors still prefer deposit-like products post-maturity, with only cautious shifts to alternatives, the manager noted. "There’s no perfect substitute for deposits," said Tu Ke, a former "deposit commando" who once traveled跨省 for slightly higher rates. "Now, you either take more risk or lower expectations."
Tu has adjusted her mindset: earning 4%+ through diversified investments could sustain her lifestyle—a form of "financial slack." Her once-rigid goal of buying a home in a top-tier city has softened.
**Deposit Migration Trends** The maturity wave is accelerating. Tianfeng Securities estimates 112 trillion yuan in CDs will mature in 2025, including 72 trillion in high-yield and 40 trillion in low-yield deposits. Over 50 trillion will mature in H2 2025, with 37 trillion being high-yield.
Peak maturities are expected from Q4 2025 to Q1 2026, particularly in September and December 2025 and early 2026.
Data reflects the shift: October saw a 1.34 trillion yuan drop in household deposits, while non-bank financial institution deposits rose by 1.85 trillion yuan.
Everbright Securities analyst Wang Yifeng attributes this to wealth management product inflows and sustained stock market activity. Shenwan Hongyuan’s chief economist Zhao Wei estimates potential stock market inflows from household savings could exceed trillions, based on historical patterns.
For banks, the maturity wave brings structural improvements in liability costs. Whether replaced with general deposits or interbank liabilities, funding costs will ease. Tianfeng projects large and joint-stock banks’ liability costs could fall by ~15bps in H2 2025, reaching ~1.5% and 1.65%, respectively, by year-end.
(Names changed for privacy.)
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