The latest report from market service provider Pystandard showed the average rate of return on banks' wealth management products fell to 3.91 percent in June, down four basis points from a month earlier.
Banks' offerings of wealth management products were also on the decline. Last month, Chinese banks issued 9,398 products, down 16.97 percent year on year.
Chen Jianing, a researcher with the Suning Institute of Finance, attributed the shrinking scale to a lack of quality assets for investment due to higher risk control standards.
While the yields of the wealth management products headed downward, large-denomination certificates of deposit (CD) were gaining increasing popularity. In June, the interest rates of newly issued CD products rose across the board, with the rate of five-year CDs gaining the most, up 21.4 basis points from May, according to data from financing platform Rong360.com.
CDs are tradable deposit agreements that allow the market to play a central role in deciding the interest rates of the financial products.
The participation threshold for purchasing a CD is set at 200,000 yuan (about 29,069 U.S. dollars) for individual investors.
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