Estimates from Wall Street: "Deposit migration" is only 1 trillion yuan, not 10 trillion yuan, but it still has "significant implications" for insurance and A-shares.

Estimates from Wall Street: "Deposit migration" is only 1 trillion yuan, not 10 trillion yuan, but it still has "significant implications" for insurance and A-shares.

The “migration” of deposits has become an unavoidable topic in the market since mid-2025: when large-term deposits mature, will funds suddenly flow out from the banking system into the stock market, insurance, real estate, or consumption? Rumored maturity scale has soared from 10 trillion all the way to 70 trillion, and what’s really expected is a “faster reallocation of funds,” enough to rewrite the supply, demand, and pricing of different assets.

According to Chase Wind Trading Desk, Bank of America Global Research analyst Michael Li has pulled this expectation back in his latest report and estimates the deposit migration scale at about 1 trillion yuan, not 10 trillion or higher. Outflow is indeed happening, but its pace and magnitude appear more “gradual,” making it difficult to see the imagined flood in the short term.

Bank of America states that resident time deposit growth has risen from the normal range of 14%-16% to 18%-22%, resulting in about 4-5 trillion yuan of “excess” time deposits, which will mature gradually in the future. The key point is maturity does not equal migration. 70%-80% will still stay in the banking system (re-deposit, transfer to demand deposits, mortgage repayment, etc.), the proportion used for consumption is less than 10%, while the actual flow into “non-deposit assets” is estimated at about 1 trillion yuan.

The report gives two direct endpoints: First, insurance—if 500 billion yuan flows into insurance, it will create “visible” flexibility on the life insurance sales side; second, A-shares—even though relatively small compared to over 100 trillion yuan in market value and daily turnover of 2.5-3 trillion yuan, it’s additional incremental capital and may be leveraged (margin trading, etc.) to amplify its impact on turnover and market sentiment. To check if the chain is really moving, the report focuses on several “trackable” data points: reversal in the share of resident demand deposits, the divergence between non-bank financial institution deposit growth and resident deposit growth, and synchronous changes in A-share turnover, margin trading, and insurance premium volume.

First, “de-noising” the scale: The market talks about 10 trillion, the report talks about 1-2 trillion

Bank of America addresses a communication noise: Deposits mature, renew, and are withdrawn every day. The so-called “deposit migration” discussion is not about normal fluctuations, but “outflows that are 5-10 times larger and much faster than usual”—this would significantly disturb stock turnover, insurance sales, real estate transactions, and even consumption.

Under this definition, the report is conservative: outflows are not nonexistent, but resemble moderate, dispersed reallocation, estimated at 1-2 trillion yuan. It does not deny that out-of-bank investments are more active; it simply argues that it is difficult in the short term to match the market’s imagination of a “massive migration.”

The report believes that the migration narrative heated up post-2025 because time deposits expanded too quickly during 2022-2023: Resident deposit growth rose from 10%-14% (end-2018 to Q3 2022) to 15%-18% (Q4 2022 to Q4 2023); resident time deposit growth was even more pronounced, from 14%-16% up to 18%-22%.

Based on quarterly calculations, the report estimates that “excess new resident time deposits” formed between Q4 2022 and Q4 2023 are about 4-5 trillion yuan, and notes these excess deposits mature mainly in the first quarter of each year.

Maturity does not mean outflow: Seventy to eighty percent remain in the banking system

One of Bank of America’s core judgments is to separate “migrable volume” from “maturing volume”: Even if 4-5 trillion yuan in excess deposits gradually matures, it will not flow out of the banking system in proportion.

The reasons given are very specific:

The risk preference of residents has not significantly increased as interest rates fall; safety remains paramount;Banks are still regarded as “the most trustworthy asset harbor” by residents;Uneven regional development means access to non-deposit financial products is limited for some populations—even if they want to migrate, channels may be lacking;Insufficient macro and employment security means “spend upon maturity” lacks prerequisites.

For the destination, the report places the bulk within the banking system: low but stable new time deposits, flexible demand deposits, mortgage repayment. Bank wealth management may offer higher returns but “non-guaranteed principal” restricts some demand. Consumption is assigned a smaller role, estimated at less than 10%; real estate is not a main outlet, while auto sales may benefit more.

Another clue pushing the migration narrative is that falling interest rates have put “opportunity cost” on the table: The current levels cited are 0.05% for demand deposits, 0.95%/1.25% for 1-year/3-year large bank time deposits, and about 1.15%/1.30% for small-medium banks.

The report also notes a practical constraint: In a low-rate environment, fulfilling “annualized over 2%, low risk (preferably guaranteed principal), good liquidity” is not easy for residents. Thus, “seeking returns” does not automatically mean “rushing toward high-volatility assets,” but more likely disperses between stocks/funds/insurance, with intensity dependent on market sentiment and available product types.

1 trillion's marginal impact: Insurance is more sensitive, A-shares amplified via the turnover chain

The argument that “1 trillion is still meaningful” centers on elasticity in two sectors.

Insurance is more direct. The report’s comparison: If insurance absorbs 500 billion yuan (half of migration scale), the increase in life insurance sales will be eye-catching. It cites 2025 first-year premiums of China Ping An Life and China Life totaling about 400 billion yuan, then estimates industry-wide first-year premiums at about 1 trillion yuan based on market share. An additional 500 billion yuan would make sales growth very sensitive.

A-shares depend more on the “turnover—leverage—market value” chain. The report acknowledges that 500 billion or 1 trillion yuan is not significant compared with A-shares’ daily turnover (which was as high as 3 trillion yuan in January), but stresses it is incremental capital beyond normal growth; also, A-share market value and quarterly daily average turnover are positively correlated (reported R² is 0.6569), so if raised turnover can be maintained for a quarter or longer, it could more easily drive market value expansion, and margin trading may act as an amplifier.

If you want to confirm whether “migration” is accelerating, just watch three groups of data

Bank of America’s observation framework is practical, focusing on breaking down the “funds first become more liquid, then off-balance, then enter stock/insurance” path into verifiable signals:

  • Whether the share of resident demand deposits rises. The report sees this as a prior signal of potential migration: funds first move from time deposits to more flexible demand deposits, waiting for opportunity. It notes that distinctly similar trends appeared mainly during the 2016-2017 bull market; for now, the share of demand deposits is stabilizing, “but strong reversal has not been observed.”
  • Divergence between resident deposit growth and non-bank financial institution deposit growth. **The report believes this better captures “funds moving from bank products toward the A-share system”; and highlights that changes over the past 6 months already show some resident deposits entering the stock market.
  • High-frequency activity in stocks and insurance. A-share turnover, margin trading, account opening data, stock/mixed fund scale, and premium growth (especially first-year premium, reflecting incremental volume) together form the evidence chain for “whether migration is more real.” The report mentions strong “Red Opening” insurance sales at the start of 2026, and rising A-share turnover and margin trading as clues worth tracking further.

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