Interest rates have dropped sharply, and cash flow in banks is...

Mixed movements in the interest rate market

A report from the State Bank of Vietnam (SBV) shows that since the beginning of the year, deposit interest rates have only increased slightly by 0.08%. The increase in interest rates mainly comes from small-scale commercial banks, while most banks have adjusted their interest rates down following the instructions of the Government and SBV.

Since February 25, 28 domestic commercial banks have reduced their deposit interest rates, with reductions ranging from 0.1% to 1.05% per year. In April, 9 banks adjusted their savings interest rates down, including VPBank, MB, Eximbank, Nam A Bank, OCB, VCBNeo, GPBank, Techcombank and Viet A Bank. Although some banks have adjusted their savings interest rates up for some short terms, in general, the number of banks reducing interest rates still dominates.

Currently, the highest interest rate on the market is 5.8%/year for 12-month term, 5.4%/year for 6-month term, and 4.4%/year for 3-month term. Meanwhile, the highest interest rate for long-term terms of the Big 4 group ranges from 4.7%-4.9%/year.

Compared to the highest mobilization interest rate two years ago, when the 12-month term interest rate reached 12%/year in early 2023, the current interest rate has decreased by 6-7%, equivalent to a reduction of 50% to 60%, depending on each bank.

As savings interest rates continue to fall, with many terms falling below inflation, the attractiveness of savings channels is gradually decreasing.

According to the survey of financial reports for the first quarter of 2025, some banks have recorded a decrease in customer deposits. Typically, Vietcombank, although a "big guy" in the industry, has slightly decreased by 0.4%, equivalent to more than 5,500 billion VND. This may be related to the bank adjusting the structure of mobilized capital, while outstanding loans only increased slightly by 1.2% in the first 3 months of the year. However, State Treasury deposits at Vietcombank have increased sharply by 56%, reaching 121 trillion VND.

In addition, some other banks also recorded a decrease in customer deposits such as Techcombank (down nearly VND 1,800 billion), TPBank (down 4%) and SeABank (down 4.9%). ABBank also recorded a decrease of 1.1% with VND 89,749 billion in customer deposits.

However, despite the downward trend in deposit interest rates, some banks still recorded deposit growth in the first quarter of 2025. Typically, BIDV continued to hold the leading position in terms of deposit size with nearly 2 million billion VND, an increase of 23,776 billion VND, equivalent to an increase of 1.2%.

Other banks such as MB, Sacombank, VPBank, SHB and HDBank also recorded strong growth in customer deposits. VPBank was the bank that attracted the most deposits, with an increase of VND66,707 billion, equivalent to an increase of 13.7%.

In the first quarter of 2025, some banks recorded a significant decrease in customer deposits.

Deposit interest rates remain stable at low levels

On the first day after the April 30 – May 1 holiday, Techcombank simultaneously increased deposit interest rates for all terms from 1 to 36 months, with an increase of 0.1%/year. This is an adjustment after the bank reduced deposit interest rates for these terms at the end of April. Thus, the deposit interest rate at Techcombank has returned to the level before the reduction.

Other banks still maintain stable deposit interest rates as at the end of April. According to the direction of the Government and the State Bank of Vietnam (SBV), the goal throughout 2025 is to maintain deposit interest rates at low levels to support credit growth. The operating policy will be flexibly adjusted depending on inflation developments and the international market situation.

In the context of well-controlled domestic inflation and abundant liquidity in the banking system, the possibility of increasing interest rates again is very low. If favorable factors such as the US Federal Reserve (Fed) lowering interest rates earlier than expected, interest rates in Vietnam may continue to decrease further.

In recent times, the State Bank has also proactively injected net money through the open market when necessary to support capital costs for banks. Currently, liquidity in the banking system is quite abundant. Experts say that the State Bank will continue to maintain a policy of stabilizing interest rates to support economic growth and in line with other macroeconomic indicators.

Bank deposit interest rates are expected to decrease further, but the decrease will not be significant; the possibility of an interest rate increase is very difficult. Bank lending interest rates are expected to remain stable or decrease slightly in some priority areas.

Economist, Dr. Dinh The Hien, said that the current VND deposit interest rate of about 5%/year is reasonable, contributing to maintaining the stability of the capital market.

He also emphasized that saving is not an investment channel to seek high profits with low risks, but mainly to preserve the value of money.

In fact, in many developed countries, deposit interest rates are often only slightly higher than inflation, reflecting the nature of this passive form of investment.

Source: https://baodaknong.vn/lai-suat-giam-sau-dong-tien-trong-ngan-hang-dang-chuyen-dich-the-nao-251639.html