Individual deposits growth slow amid lower interest rates

By Quynh Trang July 25, 2023 | 04:16 pm PT

Vietnamese citizens’ net deposits at banks increased by VND14.7 trillion (US$621 million) in May, the smallest monthly growth since October last year, as interest rates decline.

But by the end of May the figure was VND6.3 quadrillion, up 8.2% from the end of last year, the biggest growth recorded in recent years, according to the State Bank of Vietnam.

Citizens net deposits started to surge in October last year as banks raised their interest rates to 10-11% a year.

But starting from April this year deposit interest rates have plunged and hit around 8.5% a year as the central bank lowered its policy rates.

Organizations, however, have been withdrawing more than depositing.

By the end of May their deposits have decreased 3.45% from the end of last year to VND5.75 quadrillion as businesses have been complaining of cash shortage due to lack of orders.