Unexpected developments in deposit interest rates

Following Sacombank's reduction of deposit interest rates on the first day of November, the market has not seen any other banks making adjustments.

This is a rare occurrence recently and the first time in the past six months (since May 2023) that the market has gone through two consecutive business days without any banks adjusting deposit interest rates.

It seems deposit interest rates have hit rock bottom?

Currently, the highest bank interest rates are still offered by the group including PVCombank, NCB, OceanBank, BaoVietBank, CBBank, HDBank , and VietA Bank.

Deposit interest rates at these banks, for terms of 6-36 months, range from 5.7% to 6.5% per year. Currently, PVCombank is the only bank offering interest rates above 6% for deposits starting from a 6-month term.

Conversely, the group of four state-owned commercial banks still offer the lowest deposit interest rates, ranging from 4.1% to 4.7% per year for deposits with terms of 6-11 months and from 5.1% to 5.5% per year for deposits with terms of 12 months or more.

Notably, interest rates on 1-2 month term deposits at Vietcombank have fallen to a record low of only 2.8% per year. Vietcombank offers the lowest deposit interest rates among the Big4 banks.

Besides the aforementioned state-owned commercial banks, several private joint-stock commercial banks are also maintaining extremely low deposit interest rates, such as ABBank, SeABank, and Nam A Bank.

Furthermore, interest rates on 6-9 month term deposits in this group have fallen below 5% per year. Meanwhile, ABBank has even lowered deposit interest rates for 12-month and 18-month terms to 4.7% and 4.4% per year, respectively.

The fact that no banks have lowered deposit interest rates for two consecutive days indicates that deposit interest rates have stabilized. This trend is likely to continue throughout November.

According to the State Bank of Vietnam's announcement, the average interbank interest rate for overnight maturities on November 1st was 1.05% per annum, with interbank transaction volume reaching VND 221,000 billion.

Thus, interbank interest rates have risen sharply by 0.245% after five consecutive sessions of decline from their peak of 2.84% on October 24th.

Previously, on October 31, the average interbank overnight interest rate fell to 0.81%.

Compared to the end of September, the average interbank interest rate is still rising sharply, from 0.19% at that time.

In the open market, after three consecutive days of net withdrawal, the State Bank of Vietnam (SBV) returned to a net liquidity injection on November 1st after successfully auctioning 7,700 billion VND worth of 28-day treasury bills with interest rates maintained at 1.5%.

TABLE OF HIGHEST DEPOSIT INTEREST RATES AT BANKS ON NOVEMBER 3 (%/year)
BANK	1 MONTH	3 MONTHS	6 MONTHS	9 MONTHS	12 MONTHS	18 MONTHS
PVCOMBANK	3.95	3.95	6.1	6.1	6.2	6.5
BAOVIETBANK	4.4	4.75	5.8	5.9	6.1	6.4
OCEANBANK	4.6	4.6	5.8	5.9	6.1	6.5
NCB	4.45	4.45	5.7	5.75	5.9	6.1
CBBANK	4.2	4.2	5.7	5.8	6	6.1
HDBANK	4.05	4.05	5.7	5.5	5.9	6.5
VIET A BANK	4.5	4.5	5,6	5,6	6	6.3
BAC A BANK	4.55	4.55	5,6	5.7	5.8	6.1
BVBANK	4.4	4.7	5.55	5.65	5.75	5.75
DONG A BANK	4.5	4.5	5.5	5,6	5.85	5.85
GPBank	4.25	4.25	5.45	5.55	5.65	5.75
VIETBANK	4.4	4.4	5.4	5.5	5.8	6.4
SHB	3.8	4.1	5.4	5,6	5.8	6.3
KIENLONGBANK	4.55	4.75	5.4	5,6	5.7	6.4
SCB	4.5	4.5	5.35	5.45	5.65	5.65
OCB	4.1	4.25	5.3	5.4	5.5	5.9
SAIGONBANK	3.4	3.6	5.2	5.4	5,6	5,6
VIB	3.9	4.1	5.2	5.2		5.7
EXIMBANK	4	4	5.2	5.5	5,6	5.8
PG BANK	3.8	3.8	5.1	5.3	5.4	6.2
LPBANK	3.8	4	5.1	5.2	5,6	6
MB	3.5	3.8	5.1	5.2	5.4	6.1
SACOMBANK	3.6	3.8	5	5.3	5,6	5.75
VPBANK	3.9	3.95	5	5	5.3	5.1
ACB	3.5	3.7	5	5.1	5.5
TPBANK	3.8	4	5	5	5.55	6
MSB	3.8	3.8	5	5.4	5.5	6.2
TECHCOMBANK	3.55	3.75	4.95	5	5.35	5.35
NAMA BANK	4.65	4.65	4.9	5.2	5.7	6.1
ABBANK	3.7	3.9	4.9	4.9	4.7	4.4
SEABANK	4	4	4.8	4.95	5.1	5.1
AGRIBANK	3.4	3.85	4.7	4.7	5.5	5.5
VIETINBANK	3.4	3.75	4.6	4.6	5.3	5.3
MB	3.2	3.5	4.4	4.4	5.3	5.3