Despite rock bottom interest rates, bank deposits still increase to record levels

Of this total, deposits from economic organizations reached VND 6,384 trillion; and deposits from individuals reached VND 6,471 trillion. The figures include securities issued and purchased by domestic credit institutions.

Despite deposit interest rates falling to record lows, residents' deposits into the banking system have continued to increase steadily over the past year.

The average deposit interest rate at banks is currently 3.9% per year, and the average lending interest rate is approximately 6.7% per year.

Thus, deposit and lending interest rates are at their lowest levels in many years and significantly lower than before the Covid-19 pandemic.

According to the State Bank of Vietnam's report, credit growth in 2023 was 13.5%. This is a welcome figure given the sluggish credit growth in the first three quarters of the year.

At the end of January 2024, a number of major commercial banks reduced deposit interest rates, including three state-owned commercial banks: Agribank , VietinBank, and BIDV. The Big4 banks are currently maintaining the lowest deposit interest rates in the market.

In particular, Vietcombank offers the lowest deposit interest rates across all deposit terms, at only 1.7% per year for 1-2 month deposits; 2% per year for 2-5 month deposits. The interest rate for 6-11 month deposits is 3% per year, and for 12-24 month deposits it is 4.7% per year.

The fact that interest rates have fallen to their lowest levels ever has provided the basis for the State Bank of Vietnam to immediately assign credit targets for 2024 to banks at the beginning of the year, at a rate of 15%.

With aggregate demand continuing to decline in 2024, the State Bank of Vietnam (SBV) believes that measures are needed to stimulate the economy by immediately setting credit growth targets from the beginning of the year to try to boost aggregate demand. This is one of the proactive, decisive, and innovative solutions of the SBV in promoting economic growth.

HA (according to Vietnamnet)

Source: https://baohaiduong.vn/bat-chap-lai-suat-do-day-tien-gui-vao-ngan-hang-van-tang-ky-luc-372293.html