Several regional and rural Chinese banks have quietly begun lifting some deposit rates at the start of 2026, offering selectively higher returns — in some cases up to 20 basis points — on new or limited-amount products. The moves, announced by individual banks in mid-January, come amid a broader, multi-year decline in retail deposit rates and reflect a tactical effort to scoop up funding without broadly lifting funding costs.
Notable examples include Jianhu Rural Commercial Bank, which rolled out two retail products on January 14 with one-year, two-year and three-year rates ranging from 1.25% to 1.7% depending on the minimum ticket size. Macheng Rural Commercial Bank increased rates on a 200,000-yuan minimum product and raised its seven-day notice rate by 20 basis points to 0.65%. Other small lenders such as Shannan and Baoying rural commercial banks announced similar, limited-duration rate uplifts or higher-yield bespoke offerings for larger deposits.
Bank analysts describe these moves as short-term, precision marketing rather than a wholesale reversal of the prevailing downward trend in deposit pricing. Researchers at Postal Savings Bank and the Shanghai Financial and Legal Research Institute say the adjustments are driven by year-beginning performance targets, weaker brand and branch networks of smaller banks, and the need to secure loanable funds ahead of planned credit disbursements.
The broader macro picture helps explain the caution. China’s commercial bank net interest margin was 1.42% at the end of Q3 2025, a low level that constrains lenders’ appetite for higher funding costs. At the same time, the People’s Bank of China reiterated a stance of “appropriately accommodative” policy early this year, leaving room for modest policy easing, which would generally put downward pressure on deposit rates over time.
The significance of these localized rate rises is therefore nuanced. On one hand they signal funding pressure and competition at the margins of China’s banking system — particularly among smaller, deposit-dependent institutions. On the other, the increases are calibrated, often requiring higher minimum deposits or being time-limited, designed to attract targeted pools of funds while avoiding a generalised escalation in deposit costs that would squeeze margins further.
For international observers, the episode underlines two themes: the fragmentation of funding conditions across China’s banking sector, and the limited transmission of central-bank posture into uniform market outcomes. Small banks’ willingness to pay up for funds is a microeconomic response to funding and assessment cycles rather than a macro signal of imminent rate normalization.
Looking ahead, deposits are likely to remain cheap at the aggregate level or drift marginally lower, but dispersion across banks will increase as institutions with weaker deposit franchises rely on more aggressive, targeted campaigns. Policymakers and investors should watch spreads among regional lenders, the size and duration of bespoke products, and any spillovers into broader interbank funding costs as indicators of latent stress.