The Return of 5-Year Large-Denomination CDs at China's State Banks

In early August, all five of China's largest state-owned banks—Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of China, and Bank of Communications—have re-entered the market for 5-year large-denomination certificates of deposit (CDs). The move reverses a coordinated withdrawal in late 2025. The new offerings carry annualized interest rates of up to 1.60%, near historic lows, with a minimum deposit of 200,000 yuan. At ICBC, the 1.60% tranche often sells out within minutes after its 9:30 a.m. daily release, while a 1.55% version remains more accessible.

The re-emergence of these long-term instruments is not a signal of an impending rate hike. According to Wu Zewei, a special researcher at Suning Bank, the move is a fine-tuned liability-management strategy. Banks are using the CDs to replace a wave of maturing deposits and lock in medium- to long-term funding that matches the duration of their loan books—all while keeping a lid on overall funding costs amid persistent net interest margin pressure.

For the depositors who once scrambled for these products, the mood has cooled. Li Miao, who runs a deposit-information chat group with hundreds of savers, recalls days in 2023 when the group would exchange hundreds of messages daily, alerting each other to quota releases. Now, activity has dwindled as rates have fallen. Li has shifted to recommending long-term savings-type insurance policies that offer 1.80% for five years and 2.30% for ten years, with guaranteed returns. But he hasn't abandoned CDs entirely: he points to better yields in the secondary market. On Bank of Communications' transfer platform, some existing three-year CDs carry annualized yields above 1.70%, surpassing new five-year issues. One depositor even managed to snap up a three-year CD on Nanjing Bank's transfer zone at 2.13%.

Why Banks Are Offering These CDs Now—and Why Savers Aren't Excited

A Liability-Management Exercise, Not a Rate Signal

The return of 5-year large-denomination CDs is about matching assets and liabilities, not loosening monetary policy. Banks face a maturity wall of deposits taken in at higher rates years ago and need to roll them into lower-cost instruments without letting funds walk out the door. Offering a 5-year CD at 1.60% locks in cheap funding for a period when loan demand may recover, and the rate is still positive relative to current low short-term rates. It’s a careful calibration between luring deposits and protecting already-thin net interest margins—banks are managing the balance sheet, not signaling a broad shift in deposit pricing direction.

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Depositors Flee to Insurance and the Transfer Market

With deposit rates near rock-bottom, the risk-free return no longer excites savers. Insurance products with slightly higher yields and contractual guarantees are drawing attention, even though they lack liquidity and may carry surrender penalties. The shift highlights a broader search for yield in a low-rate environment, mirroring trends seen in Japan and Europe over the past decade. Li Miao's chat group, once a hive of excitement, now sees only sporadic updates—a tangible sign that for many households, the old deposit playbook no longer works.

Liquidity Through Transferability Becomes a Hidden Asset

The fact that large-denomination CDs can be transferred before maturity without losing all accrued interest gives them an embedded option. Savers who bought higher-rate CDs in the past can now sell them at a premium in the transfer market, effectively earning even more than the new-issue rate. This dynamic makes the transfer section of bank apps a treasure-hunt for yield seekers. It also explains why some investors prefer hunting for existing CDs over subscribing to new ones: a 1.70%+ yield on a transferred three-year instrument beats locking in 1.60% for five years. The mechanism rewards those who understand that the value of a CD is not just its face rate but its tradability in a market where buyers are willing to pay for a higher coupon.

Where Chinese Depositors Can Find Better Yields in a Low-Rate Environment

For Chinese households sitting on cash, there are concrete steps to squeeze more out of today's meager deposit rates:

  • Scour transfer boards. Several state bank apps list used CDs from other customers; yields can exceed 1.70% for three-year terms versus 1.60% for new five-year CDs. Check the transfer sections of Bank of Communications, ICBC, and smaller banks like Nanjing Bank where yields above 2% have appeared.
  • Act fast on new issues. ICBC’s 1.60% quota often disappears by 9:35 a.m.; set an alarm and log in before the 9:30 a.m. release if you want a new-issue CD at the top rate.
  • Compare insurance products carefully. Long-term savings-type policies offer up to 2.30% for 10 years but lock money in. Before switching, read surrender terms and assess whether you can afford to tie up that cash; a 5-year insurance policy yielding 1.80% may only make sense if you genuinely won't need the funds earlier.
  • Split your funds. Use new CDs for a portion of safe assets to guarantee liquidity via the transfer feature, while exploring higher-yield insurance for long-term money you won’t touch. This lets you capture both liquidity and a modest yield premium.