The recent drop in one – year fixed deposit interest rates below 1% has prompted many depositors to seek alternative investment options. According to the latest report from the Banking Wealth Management Registration and Custody Center, as of the end of the first quarter of 2025, the number of investors holding wealth management products reached 126 million, marking a 6.73% year – on – year increase. This trend indicates a significant shift in consumer behavior driven by the search for higher returns in a low – interest – rate environment.
Banking Institutions Adjust Strategies
In response to this trend, banking institutions have been quick to adjust their strategies. Banks such as China Merchants Bank, Hua Xia Bank, and Hangzhou Bank have been actively promoting and selling a variety of short – term fixed – income products. These products are designed to be “low – volatility and stable,” catering to consumers’ preferences for safer investments that offer better returns than traditional deposits. Additionally, banks have enhanced the appeal of these products through measures such as rate discounts and reduced fees, aiming to attract both new and existing customers.
Market Overview of Wealth Management Products
As of the end of April 2025, monitoring data from Puyi Standard revealed that there were 39,203 outstanding wealth management products in the market, with fixed – income products accounting for a substantial 92.4%. This dominance of fixed – income products reflects the current market demand for stable returns. Banks have been leveraging this trend by reducing fees to make their wealth management products more attractive to investors.
Long – Term Focus on Investment Research
While short – term measures such as fee reductions are effective in attracting customers, wealth management companies recognize the need for long – term strategies. To maintain their competitive edge, these companies are focusing on maintaining their investment research advantages in fixed – income assets. Simultaneously, they are strengthening the construction of a multi – asset and multi – strategy investment research system. This approach aims to provide a broader range of investment options and continuously attract customers by offering diverse and innovative products.
Conclusion
The decline in bank deposit interest rates has significantly influenced the investment behavior of depositors, driving them towards wealth management products. Banking institutions have responded proactively by adjusting their product offerings and enhancing their appeal through fee reductions and rate discounts. However, the long – term success of wealth management companies will depend on their ability to maintain strong investment research capabilities and develop a robust multi – asset investment strategy. This dual approach will be crucial in meeting the evolving needs of investors and ensuring sustained growth in the wealth management sector.
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