More commercial banks are offering the highest rates legally allowed for medium- and long-term yuan deposits as competitive and liquidity pressures intensify.

The banks are offering 10 percent more than the benchmark interest rates, which is the upper limit under current rules.

Analysts said that more banks are likely to follow suit as China pursues interest-rate liberalization. However, they said, abolishing the ceiling on deposit rates may be a longer, more complex process than the recent removal of lending rate floors.

As of Wednesday, more than 10 banks were offering 5.225 percent interest rates on five-year term deposits in Beijing, Shanghai and other big cities, according to bankrate.com.cn.

In Beijing, China Everbright Bank Co and Ping An Bank Co Ltd were offering the 10-percent premium on two-year, three-year and five-year term deposits. Guangdong Development Bank Co was offering the premium on two-year and three-year term deposits, the banks' brochures show.

The current benchmark interest rates for time deposits set by the People's Bank of China, the central bank, are 3 percent for one-year terms, 3.75 percent for two-year terms, 4.25 percent for three-year terms and 4.75 percent for five-year terms.

Shanghai resident Shu Meiyun, 65, recently moved a 100,000 yuan ($16,340) deposit to take advantage of the premium rate. "My returns will increase 475 yuan per year, not a big sum but good enough," said Shu.

Low savings returns may fatten lenders' profit margins, while higher deposit rates are positive for China's households and economic growth in the long run, said analysts.

"Low returns on bank deposits, below the rate of inflation, have been crimping income and impairing depositors' ability to spend. Low consumption definitely doesn't do anything for domestic demand growth," said Wu Yinzhou, an analyst with Shanghai Fulun Consultancy.