Core answer: Deposit laddering beats both all-short (low yield) and all-long (lock-in risk): split into 1/2/3-year rungs, roll each maturity into a new 3-year rung — after year 3, every year one rung matures at 3-year rates. Current China rates (2025): demand ~0.05%, 1-yr ~0.95–1.35%, 3-yr ~1.5–1.9%, 5-yr ~1.55–1.95%. Above deposit insurance: spread money across banks — each covers ¥500k per depositor per bank.
The rate landscape (2025, big banks)
| Term | Typical rate | Liquidity |
|---|---|---|
| Demand 活期 | 0.05% | instant |
| 3-month | 0.65–0.85% | high |
| 1-year | 0.95–1.35% | yearly |
| 2-year | 1.05–1.45% | medium |
| 3-year | 1.5–1.9% | locked |
| 5-year | 1.55–1.95% | locked (rate inversion common) |
Small banks pay +0.2–0.5% over big banks — within the same ¥500k deposit-insurance umbrella.
The ladder in action (¥150k)
- Year 0: ¥50k × 1yr, ¥50k × 2yr, ¥50k × 3yr.
- Year 1: 1-yr rung matures → roll into 3-yr.
- Year 2: 2-yr matures → roll into 3-yr.
- Year 3+: every year ¥50k matures, all earning 3-yr rates, one rung always liquid.
vs all-demand: +¥2,000+/year on ¥150k at current spreads; vs all-3-year: no 3-year total lockup.
Worked examples
Example 1 — The ¥500k insurance boundary. ¥1.2M in one bank: only ¥500k guaranteed (principal + interest). Split across 3 banks → fully covered. The insurance has paid out (Baoshang Bank 2020), but the rule stands.
Example 2 — Early-withdrawal math. ¥100k in a 3-yr at 1.9%, withdrawn at year 2: interest reverts to DEMAND rate (0.05%) for the whole period ≈ ¥100 total — the ¥3,700 you expected becomes nothing. Ladders and emergency funds exist to prevent exactly this.
Example 3 — 大额存单 (CDs). ¥200k+ unlocks negotiable CDs at +10–30 bp over standard deposits, often transferable (可转让) — transferable CDs fix the early-withdrawal problem by letting you sell instead of redeeming.
Example 4 — Alternatives in the same risk class. Money-market funds ~1.3–1.6% (T+0), 国债 reverse-repo spikes at quarter-end, 3-yr savings bonds (储蓄国债) ~1.9–2.3% with early-redemption step-rates — compare after-tax, after-liquidity, not just headline.
Common mistakes and myths
- Rate-chasing beyond ¥500k — a +0.3% rate at an uninsured amount risks 100% of principal for 0.3%/year; split banks first.
- Locking everything long — rates change, life happens; ladders keep one rung maturing yearly.
- Letting maturities roll to demand — auto-rollover default is often demand rate; set rollover instructions or calendar reminders.
- Assuming deposits beat inflation — at 1.5% rates and 2% inflation, real return is negative; deposits are for SAFETY and short horizons, not wealth building.
- Ignoring step-rate products — 靠档计息 was regulated away, but savings bonds still pay stepped rates on early redemption; read each product's early-exit table before committing.