(Yicai Global) May 16 -- The interest rates of various types of certificates of deposit from China's commercial banks have risen across the board recently. 
These increases reflect the growing trend to unify bank and money market rates, professionals in the sector told Yicai Global, adding the upper limit is expected to further ease in the long run.

In contrast to market-oriented money market rates, the rates commercial banks offer depositors can only fluctuate within a small range around the official benchmark rate. The country's central bank the People's Bank of China introduced the CD system from 2015, allowing the rate for this kind of larger deposit to fluctuate within a wider range as against general deposits.

Commercial banks' fixed-term deposits with differing maturities have had widespread increases in interest rates recently, with CD rates growing significantly, Yicai Global found via a field investigation. Urban and rural commercial banks which find it relatively difficult to attract deposits have even raised their CD rates by over 53 percent from the benchmark.

The increases stem from the issuance of wealth management products that are more market-oriented in rate of return falling after the PBOC implemented new regulatory policies, noted Yang Huiming, financial analyst at Beijing-based provider of customized financing and loan services Rong360's Big Data research center. As a result, CDs have become an important way for banks to hit their deposit targets, with rate increases becoming a major bait to lure investors.

Editor: Tang Shihua, Ben Armour