Deposit interest rates continue to drop

By Quynh Trang   January 19, 2024 | 04:53 pm PT
Over 20 banks have cut their deposit interest rates, with rates for 1-month deposits now as low as 1.7% per year.

On January 17, a VnExpress survey of 34 lenders revealed that three key state-owned banks in Vietnam -VietinBank, BIDV, and Agribank - implemented rate cuts for deposits with terms under 12 months.

VietinBank and BIDV reduced their rates for these deposits by 0.7 percentage points compared to the end of last year, resulting in an annual interest rate of 1.7% for 1-month term deposits, 2.2% for 3-month terms, and 3.2% for six- to nine-month terms.

Agribank also dropped its rates by 0.3-0.4 percentage points to 1.8% a year for short-term deposits.

Earlier in the month, Vietcombank, another major state-owned bank, reduced its interest rates by 0.2 percentage points for three- to nine-month deposits, and by 0.1 percentage points for 12-month deposits.

Currently, deposits with a term of one to nine months at Vietcombank have an interest rate of 1.7-3% a year while 12-month deposits earn 4.7% a year.

The downward trend in deposit interest rates is not limited to state-owned banks, as 20 other private banks have also decreased their deposit rates.

Techcombank, MSB, SeABank, OCB, LPBank, and Oceanbank made some of the most significant adjustments, reducing rates by 0.5-1 percentage points for short-term deposits.

Currently, most banks are offering interest rates of 5-5.7% a year for deposits under VND1 billion with a 12-month term.

Approximately 10 banks offer rates below 5% for the same deposit and term, including both state-owned and private banks such as MB, ACB, TPBank, MSB, OCB, Techcombank, SCB, VIB, and ABBank.

Additionally, long-term deposit interest rates at many banks have also decreased by 0.1 to 1.3 percentage points compared to the end of 2023.

For longer terms of 15-24 months, only five banks, namely SHB, NamABank, HDBank, LPBank, and PGBank, are offering interest rates above 6% per annum.

There were 10 banks offering such rates at the start of the month.

Securities firms note that banks have little room to reduce deposit interest rates further this year, as the rates are already lower than during the Covid-19 period.

Despite declining rates, savings deposits by individuals and businesses had reached a record high of VND13.5 quadrillion by December 31, 2023, up 14% from 2022.

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