Almost 40 basis points higher than the same period fixed deposit! 30 billion yuan government bonds are hot. On-the-spot report: residents lining up to "grab bonds" with many branches sold out.

The “Debt Grab Battle” Reappears in the Era of Low Interest Rates. On the morning of March 10, the first batch of 2026 savings government bonds (certificates) was issued. As of around 10 a.m. today, multiple bank branches contacted by Caixin News have sold out their allocated quotas.

Many managers at state-owned bank lobbies told Caixin News that there are actually few quotas available at each branch, and the bond interest rates are significantly higher than current deposits, so you have to rush to buy.

An analyst from a South China securities bank told Caixin News today that the popularity of government bond sales reflects that most residents’ asset allocation logic has not changed under the current circumstances, and the pursuit of high-yield, low-risk assets remains urgent. For banks, this means that the cost of liabilities is expected to decrease slowly.

Interest rates are 40 basis points higher than the same period fixed deposits, residents stage a “bond grabbing battle”

According to the Ministry of Finance’s announcement, the first two issues of government bonds this year (2026 first and second series) have a total issuance of 30 billion yuan, issued from March 10 to 19. The first series is 15 billion yuan, with a 3-year term and a coupon annual interest rate of 1.63%; the second series is 15 billion yuan, with a 5-year term and a coupon annual interest rate of 1.70%.

Caixin News noticed that compared to the same period in 2025, the coupon rate of this year’s first batch of savings government bonds has decreased by 30 basis points, but it still exceeds the current fixed deposit rates of major state-owned banks by nearly 40 basis points. For example, Agricultural Bank of China currently offers annual interest rates of 1.25% for 3-year fixed deposits and 1.30% for 5-year fixed deposits.

It is this 40 basis point interest rate difference that has ignited market enthusiasm. Around 10 a.m. today, Caixin News visited branches of ICBC, Agricultural Bank, and Bank of Communications in Shenzhen, but all were told that the relevant government bond quotas had already sold out or were tight.

Among them, managers at ICBC and Agricultural Bank clearly told Caixin News that the quotas for the bonds issued today had sold out in the morning. When asked if there would be quotas tomorrow, they responded, “All quotas are gone, there won’t be any tomorrow.” A manager at an Agricultural Bank branch admitted, “The current issuance interest rate is higher than deposits, so you have to rush to buy.”

Notably, among the limited quotas, residents prefer to choose longer-term, higher-interest options. A client manager at a Bank of Communications branch told Caixin News that the five-year government bond quota was snapped up early, but there are still quotas for the 3-year bonds, which can be purchased at the counter.

“Now deposit interest rates might decrease again, locking in five-year returns is definitely better,” a citizen consulting at the branch told Caixin News, indicating he would prioritize buying the five-year government bonds to lock in long-term gains.

Additionally, Caixin News noted that according to relevant documents from the Ministry of Finance, starting from this issuance, the amount an individual can purchase for a single period of savings government bonds (certificates) has been adjusted to no more than 1 million yuan, down from 3 million yuan last year (2025).

Residents’ Asset Allocation Logic Unchanged, Industry Says Bank Liability Costs Hard to Decrease

The first batch of government bonds sold out quickly this year. Industry analysts believe this reflects that most residents’ asset allocation logic has not changed significantly. “Especially with gold prices fluctuating at high levels now, residents’ investment options may be even more limited,” said the aforementioned securities analyst. “Safety and as high a return as possible remain the top priorities for residents’ current investments.”

Furthermore, the market’s frequent discussion at the beginning of the year about “moving” deposits upon maturity is now seen as not large-scale “escape,” but rather reallocation among low-risk assets. Caixin News observed that recent data from Tianfeng Securities’ fixed income team indicated that “February’s wealth management scale returned at a slow pace.” Meanwhile, a person from a wealth management company told Caixin News this afternoon that there is no data showing large-scale deposit funds flowing into wealth management channels.

Industry analysts believe that, given that residents’ risk preferences have not changed significantly, a large amount of funds still prefer to stay within the banking system, making banks compete for these deposits. Attention remains on changes in banks’ liability side, which are expected to be difficult to decrease.

On March 9, Huang Yi, a deputy of the National People’s Congress and chairman of Sichuan Tianfu Bank, said in an interview that from the liability side, although the listed deposit interest rates have generally been lowered, the trend of “deposit termization” and “long-term preference” has not fundamentally reversed. Banks still face rigid deposit costs, further compressing the interest margin space.

(Source: Caixin News)