How much savings can still be "moved" to the stock market?
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The large amount of fixed-term deposits held by Chinese households and corporations is entering a peak period of concentrated maturity, marking the start of a vast “deposit activation” process.
According to a recent research report by Dongwu Securities, financial data show that signs of deposits “shifting” are becoming increasingly apparent. From July to August 2025, deposits in non-bank financial institutions (“non-bank deposits”) increased by 3.03 trillion yuan in excess of seasonal norms, attracting broad market attention to the phenomenon of “savings entering the market.”
Dongwu Securities believes that among this increase, the “shifting” of household and non-financial corporate deposits contributed 1.42 trillion yuan, and this round of transfer manifests more as the “activation” of fixed-term deposits, with household fixed-term deposits taking a dominant role, decreasing by 842.6 billion yuan seasonally adjusted in the same period.
Dongwu Securities notes that high-yield fixed-term deposits will see a wave of concentrated maturity between 2025 and 2026, which will lead to increased liquidity (or shift to non-bank deposits) from households and corporates. Although some reduction in fixed-term deposits has already begun since July 2025, the peak of large-scale deposit “shifting” has not yet arrived. It is estimated that there will be 22.28 trillion yuan and 9.4 trillion yuan of fixed-term deposits maturing in 2025 and 2026, respectively, among which “excess” fixed-term deposit maturities will reach 11.08 trillion yuan and 4.05 trillion yuan, respectively.
Morgan Stanley stated in its report on the 18th that the unleashing of household savings potential will be a gradual process, proposing a three-stage roadmap: First, over the next 2-3 years, restore market confidence and guide 6-7 trillion yuan of excess fixed deposits into the stock market and other risk assets; second, over the following 6-8 years, reshape inflation expectations through structural reforms and gradually release a vast 30 trillion yuan savings pool; lastly, implement long-term social security reforms to lower the overall savings rate.
Dissecting the Sources of “Deposit Shifting”: Resonance of Households and Interbank Activities
According to Dongwu Securities, the excess seasonal growth of 3.03 trillion yuan in non-bank deposits from July to August 2025 originates from multiple sources—not just from household “deposit shifting.”
Specifically, the increase is mainly composed of three factors:
Household and corporate deposit transfer: Contributed 1.42 trillion yuan, representing the traditional “deposit shifting,” i.e., households and corporations converting general deposits into non-bank deposits via purchasing wealth management products or directly investing in the stock market.Expansion of interbank business within the banking system: Contributed 1.18 trillion yuan. The report points out that, under pressure from narrowing interest margins, banks increased bond investments, leading to expansion of interbank business and the resulting derivation of non-bank deposits.Other deposit transformations: Deposits not included in broad money (M2) statistics, such as large negotiable time deposits, also contributed an increase of 103.3 billion yuan.
Although the driving factors are complex, household deposits—particularly fixed-term deposits—have played a core role in the wave of “deposit activation.” Citing bank credit and balance sheet data, Dongwu Securities states that households were the “main force” behind deposit structure changes in July and August. In this period, household fixed-term deposits decreased seasonally by 842.6 billion yuan, far exceeding the decrease in household demand deposits (444.6 billion yuan), non-financial corporate fixed-term deposits (315.6 billion yuan), and demand deposits (121.9 billion yuan). The report argues that, since 2025, “deposit shifting” is largely about making fixed-term deposits more liquid, and the real peak of funds entering the market is yet to come.
Potential Liquidity: Over 15 Trillion Yuan of “Excess Fixed Deposits” Maturing in the Next Two Years
The real highlight lies in the future. The report estimates that an even larger wave of fixed-term deposit maturities is fast approaching. Due to the peak period of deposit “fixing” between 2022 and 2023, a large volume of high-yield fixed deposits will mature intensively in 2025 and 2026.
Based on estimates of the maturity structure of new deposits from 2021 to 2024, the report offers two levels of forecast data:
In absolute terms: Of the 66.54 trillion yuan of fixed-term deposits added from 2021 to 2024, 22.28 trillion yuan and 9.4 trillion yuan are expected to mature in 2025 and 2026, respectively. In just the second half of 2025, 524 billion yuan and 166 billion yuan will mature in Q3 and Q4, respectively.In terms of “excess” scale: Excluding trend-based growth, about 11.08 trillion yuan and 4.05 trillion yuan of “excess” fixed-term deposits are expected to mature in 2025 and 2026, respectively. Of these, about 2.13 trillion yuan and 2.81 trillion yuan are expected to mature in Q3 and Q4 of 2025.
A Three-Step Roadmap for Unlocking Savings
Morgan Stanley’s report states that China’s household savings rate is as high as 35%, far exceeding other major global economies. Drawing on international experience and China’s actual conditions, Morgan Stanley proposes a three-stage roadmap to unleash the potential of Chinese household savings:
Stage 1 (the next 2-3 years): Boost risk appetite and guide deposits into the stock market. The report believes that market response to policy direction and liquidity precedes the fundamentals. Since the policy shift in September 2024, a more constructive market narrative is taking shape. This has prompted about 6-7 trillion yuan of excess fixed-term deposits to start moving into stocks and other risk assets. This process is still in its early stages and is mainly driven by the high-net-worth population.Stage 2 (the next 6-8 years): Reshape inflation expectations and unlock savings for consumption. To convert as much as 30 trillion yuan of cyclical excess savings into consumption, the key is to change household expectations for future income and prices. Higher inflation expectations reduce the appeal of holding cash, thus encouraging present-day spending.Stage 3 (long term): Comprehensive social security reform to reduce structural savings rates. This is the fundamental solution. Establishing a unified national social insurance system, narrowing the urban–rural gap, and improving protection standards will fundamentally reduce households’ precautionary savings motive.
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