State-owned major banks reintroduce 5-year personal large-denomination certificates of deposit

Recently, Bank of China issued an announcement stating that it would launch the first batch of personal large-denomination certificates of deposit (CDs) for 2026 on July 1, drawing market attention.

The announcement shows that this batch includes standard fixed-rate large-denomination CDs in RMB, covering seven maturities: 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, and 5 years. The product types are divided into three categories: regular products, Product 1, and Product 3. Among them, the annualized interest rate for the 5-year regular product is 1.6%; the annualized interest rate for the 5-year Product 3 is 1.55%, with a minimum deposit amount of 200k yuan for both.

Bank of China stated in the announcement that the interest rates on large-denomination CDs are more competitive than those on listed deposit products of the same maturity, and they offer good liquidity, allowing multiple partial early withdrawals, collateral loans, and for products with one-time interest payment at maturity, transfers between individual customers are supported. Additionally, they are highly secure and feature-rich.

After checking the Bank of China App, a reporter from Securities Daily learned that the bank's current annualized interest rate for a 5-year lump-sum deposit and withdrawal time deposit is 1.30%. In comparison, the interest rate on large-denomination CDs is indeed more advantageous, offering higher returns.

Loup Feipeng, a researcher at the Postal Savings Bank of China, told Securities Daily that Bank of China's reintroduction of 5-year large-denomination CDs reflects the bank's need to stabilize liabilities despite narrowing net interest margins. This move aims to lock in long-term low-cost funding in advance to cope with downward pressure on asset-side yields.

"Bank of China's resumption of issuing 5-year large-denomination CDs is based on its special liability structure needs arising from its cross-border business, rather than a reversal of industry trends," said Tian Lihui, a finance professor at Nankai University, in an interview with Securities Daily. As the state-owned bank with the highest degree of internationalization, it needs to match long-term liabilities with medium- to long-term cross-border assets to alleviate duration mismatch pressure. The 5-year personal large-denomination CD rate (1.60%) is only 5 basis points higher than the 3-year rate (1.55%), keeping costs manageable, and the transfer mechanism reduces liquidity risk. Against the backdrop of net interest margin narrowing to 1.40%, this move is the bank's precise optimization of its own asset-liability characteristics.

In fact, several major state-owned banks delisted 5-year large-denomination CDs at the end of 2025. As of now, except for Bank of China, no other major state-owned banks have relisted 5-year large-denomination CDs. After checking the mobile banking apps of the other five major state-owned banks, a Securities Daily reporter found that the longest maturity for large-denomination CD products currently on sale at ICBC, Agricultural Bank of China, and China Construction Bank is 3 years, with the highest annualized interest rate at 1.55%, and some products show sold-out quotas. Postal Savings Bank of China and Bank of Communications currently have no large-denomination CD products on sale.

Regarding future industry trends, Tian Lihui believes that the likelihood of other banks following suit in issuing such products is low. With ample liquidity and a prevailing expectation of interest rate cuts, banks generally prefer short-term products to flexibly respond to declining rates. In the future, the supply of large-denomination CDs may show structural differentiation, with state-owned banks continuing to reduce long-term products and regional banks possibly issuing them temporarily at certain points, but the industry-wide tone of "short duration, low rates" remains unchanged.

[Author: Yang Jie] (Editor: Wen Jing)

Keywords:
large-denomination certificates of deposit