Bank deposit interest rates fall below pre-pandemic levels

By Quynh Trang   October 3, 2023 | 06:57 pm PT
Bank deposit interest rates fall below pre-pandemic levels
Stacks of money at a bank in HCMC. Photo by VnExpress/Thanh Tung
Some major banks have slashed interest rates for 12-month deposits to below 5.5%, or lower than in the pre-pandemic period.

In early October, state-owned Vietcombank continued to reduce them and they fell to the lowest levels in years. Its interest rates on three-month deposits decreased by 0.2 percentage point.

Since Oct. 3 the highest annual interest rate at Vietcombank has been 5.3%, lower than the Covid-19 period (some 5.8%).

The three other state-owned lenders, Agribank, BIDV and VietinBank, have capped deposit interest rates at 5.5%. VnExpress surveyed 34 domestic banks for their interest rates.

In the case of private banks, the cuts have been especially steep by some small lenders like BaoVietBank, LPBank, ABBank, and CBBank.

They were offering 11-12% at the end of 2022, but as of Oct. 3. the highest rate at any of them is 7% offered by DongABank for online 13-month deposits.

Around a dozen offer 6% for 12-month deposits, 20 others have slashed the rate to below 6%.

A dozen, including the four state-owned banks and private ones such as VPBank, MSB, Techcombank, SeABank, GPBank, and ABBank offer rates of 5.5% or less.

By lowering deposit interest rates banks will be able to cut lending interest rates and support Vietnam’s economic recovery.

Deposit interest rates have steadily fallen in the past few months as banks are awash in liquidity due to sluggish credit growth.

As of the end of September, the credit growth rate for the year was only 5.73%, half that in the same period last year and just a third of this year’s target.

Three years ago the low deposit interest rates during Covid-19 caused cash to flow into other asset classes such as securities and property.

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