Chinese banks to offer negotiable certificates of deposit to households, businesses

China’s banks can now offer large-denomination negotiable certificates of deposit to households and non-financial firms, allowing depositors willing to lock away their money for one month to five years to enjoy a market rate for their deposits rather than the state-determined benchmark of 2.25%, South China Morning Post reported, citing an announcement from the People’s Bank of China. The minimum for households will be RMB300,000 (US$48,400) and RMB10 million (US$1.613 million) for corporations. But yields for such certificates may have trouble competing with banks’ wealth management products, which average a 5.2% return for three-month products; the three-month interbank rate on which many of the new certificates will be priced is only 2.85%, according to Barclays Research.