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

Yang Jie, a reporter

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

According to the announcement, this round will offer RMB standard fixed-rate large-denomination CDs, including seven tenors: 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, and 5 years. The product types include three categories: ordinary products, Product 1, and Product 3. Among them, for the 5-year ordinary product, the annualized yield is 1.6%; for the 5-year Product 3, the annualized yield is 1.55%, with the minimum starting amount of RMB 200k for both.

In the announcement, Bank of China said that large-denomination CD rates are more competitive than posted time-deposit products of the same tenor, and the products offer good liquidity: they allow multiple partial early withdrawals, can be used to apply for pledged loans, and support personal clients’ transfer among each other for the maturity lump-sum interest payment products. In addition, they are highly secure and feature-rich.

After checking on the Bank of China app, a Securities Daily reporter learned that the bank’s annualized interest rate for a 5-year term deposit with principal and interest locked in is currently 1.30%. Compared with that, large-denomination CD rates indeed have an advantage, offering higher returns.

Lou Feipeng, a researcher at Postal Savings Bank of China, told a Securities Daily reporter that Bank of China’s restart of 5-year large-denomination CDs reflects the banks’ need for stable funding even under the background of a narrowing net interest margin. The move aims to lock in long-term low-cost funds early to deal with downward pressure on asset-side yield.

“Bank of China restarting the issuance of 5-year large-denomination CDs is due to its own special-liability structure demand based on its cross-border business, rather than a reversal in industry trends.” Tian Lihui, a professor of finance at Nankai University, said in an interview with a Securities Daily reporter. As the most internationally oriented state-owned big bank, the bank needs to match long-term liabilities with medium- and long-term cross-border assets to alleviate duration mismatch pressure. The 5-year interest rate on personal large-denomination CDs (1.60%) is only 5 basis points higher than the 3-year rate (1.55%), keeping costs controllable. Meanwhile, the transfer-support mechanism reduces liquidity risk. Against the backdrop of the net interest margin narrowing to 1.40%, this move is a precise optimization tailored to the bank’s own balance-sheet characteristics.

In fact, several state-owned big banks had previously taken down 5-year large-denomination CDs at the end of 2025. As of now, besides Bank of China, other state-owned big banks have not resumed listing 5-year large-denomination CDs. After a Securities Daily reporter checked the mobile banking apps of the other five state-owned big banks, it was found that currently the maximum tenor of the large-denomination CD products sold by Industrial and Commercial Bank of China, Agricultural Bank of China, and China Construction Bank is all 3 years, with the highest annualized yield being 1.55%. Some products also show that quotas are sold out; Postal Savings Bank and Bank of Communications currently have no large-denomination CD products on sale.

Regarding the subsequent industry trend, Tian Lihui believes that the likelihood of other banks following up and issuing may be low. Currently, the liquidity environment is relatively loose, and expectations of interest-rate cuts dominate. Banks generally prefer to use shorter-tenor products to flexibly respond to falling rates. In the future, the supply of large-denomination CDs may show structural differentiation: state-owned big banks may continue to reduce long-tenor products, while regional banks may issue around certain time points in stages. However, the industry-wide tone of “shorter duration and lower interest rates” will remain unchanged.

(Editor: Qian Xiaorui)

Keywords: