Bank deposits grow slowly amid low interest rates

By Quynh Trang June 18, 2021 | 10:00 pm PT

An employee counts Vietnamese banknotes at a bank in Hanoi. Photo by VnExpress/Giang Huy.

Bank deposits made by individuals in the first four months were up a mere VND120 trillion ($5.2 billion) year-on-year, the lowest rate of increase in the last six years.

The increase was only half that in the same period in 2019, the year before the Covid-19 pandemic broke out.

Since the end of 2019, deposit interest rates have fallen by 1.5-2.5 percentage points.

The State Bank of Vietnam has also cut policy rates as banks have large amount of cash while businesses struggle to borrow as a result of the pandemic’s impacts.

Analysts said people are withdrawing money from bank accounts to invest in stocks, a new asset class for many Vietnamese, as they seek to make quick profits in a booming market.

Over 113,000 trading accounts were opened last month, the highest monthly figure ever.

Trading on the main bourse, the Ho Chi Minh Stock Exchange, in May rose by 53 percent from December to VND438.75 trillion.