In fact, both personal call deposits and smart call deposits have higher interest rates than demand deposits. Faced with the pressure of continuously narrowing interest margins, smart call deposit products have become an important entry point for banks to accurately control liability costs.

In May 2023, the regulatory authorities required banks to adjust the self-regulatory upper limits of agreement deposits and call deposits, and also required banks to stop call deposits that do not require customer operation and are intelligently rolled over automatically. Currently, small and medium-sized banks are collectively shutting down smart call deposits, which may be a continuation of this regulatory measure.

While many small and medium-sized banks have canceled the automatic transfer function of call deposits, some banks have further lowered time deposit interest rates, which is objectively helpful for banks to further reduce their liabilities.

Compared with large and medium-sized banks, it is more normal for small and medium-sized banks to lower their deposit interest rates. Since October this year, many local banks have announced reductions in the listed interest rates for RMB deposits.

For example, on October 20, the current deposit interest rate of Pufa Rural Bank in Pingyang, Zhejiang was reduced by 20 basis points to 0.05%; the three-month time deposit interest rate was reduced by 40 basis points to 0.7%; the six-month and one-year time deposit interest rates were both reduced by 35 basis points, respectively, to 0.95% and 1.15% after adjustment; the 2-year time deposit interest rate was reduced by 50 basis points to 1.2%; the 3-year and 5-year time deposit interest rates were both reduced by 80 basis points, to 1.3% and 1.35% respectively after adjustment.

On October 16, Fujian Huatong Bank issued an announcement stating that it would adjust the listed interest rates of partial-term RMB deposits. The listed interest rates of 6-month personal time deposits were reduced to 1.5%; the listed interest rates of 1-year personal time deposits were reduced to 1.6%.

It is worth noting that some businesses have also experienced the phenomenon of “low profits for long-term deposits” after lowering bank deposit interest rates. For example, Shanghai Huarui Bank’s adjusted 3-year lump sum time deposit interest rate is 2.15%, and the latest 5-year lump sum time deposit interest rate is 2.1%. At the end of September, the bank had lowered the interest rates on 3-year and 5-year time deposits. After investigation, Huarui Bank has cut interest rates a total of 7 times this year, mainly for 3-year and 5-year medium and long-term deposits.