A sweeping reallocation of household savings has begun in China, long dominated by bank time deposits. Beijing’s retail balance sheet — roughly 162 trillion yuan in deposits by the piece’s math — contains a wave of three- and five-year contracts that are coming due over 2025–26. Chinese commentators estimate as much as 90–120 trillion yuan will need to be put to work or parked somewhere new, prompting what they call an unprecedented “big money move.”
The dynamics are straightforward but large in scale. Many savers bought fixed deposits in recent years when five-year yields were comparatively generous; those contracts now mature into a low-rate environment where five-year deposits are paying little more than 1–1.5 percent. Faced with very low bank rates, households are re-assessing options: some will stay in banks, some will shift to smaller banks for higher rates, others will move into wealth-management products, insurance policies, real-estate prepayments or the stockmarket via intermediaries.
The flows already visible in early 2026 show five broad directions. A large portion of money will remain in banks as precautionary balances despite negligible yields, a parallel to post-crisis Japan where deposits stayed high even with near-zero rates. Another sizeable chunk is expected to be converted into bank wealth-management products that buy fixed-income securities, with market observers pencilling in 7.5–9 trillion yuan into that channel.
Smaller banks are attracting deposits by offering higher rates — anecdotal spreads cited range from about 1.8 percent at big banks to 2.6 percent or more at some regional lenders. Insurers are marketing participating whole-life or dividend-style products that combine a minimum guarantee with upside, and those policies are estimated to draw roughly 500 billion yuan. Mortgage prepayments may absorb up to another 500 billion as borrowers seize opportunities to cut interest costs when home-loan rates fall.
Equities remain a smaller direct recipient so far, with direct household buying under 1 trillion yuan, but routed investment via private funds, insurance asset allocations and other intermediaries could push 1–2 trillion yuan into markets. The recent surge in trading turnover and equity prices is both a driver and a signal: higher markets attract deposit conversions, while rising markets feed consumption and investment narratives that policymakers favour.
The move matters beyond portfolio composition because it reshapes how China finances growth. If large-scale household savings flow into stocks and equity-backed financing, that could accelerate the state’s push towards “dual-high” industries — high-tech and high-end manufacturing — by deepening equity markets and easing corporate financing. It also amplifies the wealth-effect channel through which asset gains translate into consumption and broader economic momentum.
But the transition entails risks. Concentration of new deposits in undercapitalised regional banks could raise fragility and prompt regulatory action. A rapid rerouting into higher-risk products or illiquid private funds may expose households to principal loss and reputational fallout for financial firms. And should policymakers pivot to prop up equity prices as a national growth lever, that could create moral-hazard dynamics and uneven wealth gains that complicate social and macroeconomic management. Analysts and investors will be watching the composition of new flows, regulatory responses, and signs that the shift is structural rather than cyclical.