Deposit interest rates increase again, short-term term near "ceiling"

Deposit interest rates increase again, short-term term near "ceiling"

Over the past time, deposit and lending interest rates have decreased significantly. However, since mid-April, many banks have started to adjust their rates upward again, approaching the 6% mark for 6-month terms and approaching the "ceiling" for short-term terms.

Ms. Bao Thanh (Hai Ba Trung - Hanoi ) said that she recently went to "exchange her book" at National Citizen Commercial Joint Stock Bank (NCB). She was quite surprised when she was informed that the interest rate was 5.75%, an increase of 0.4% compared to before.

In early April, Ms. Thanh also exchanged another book at Bac A Commercial Joint Stock Bank (BacA Bank). At that time, the interest rate had not changed. However, BacA Bank slightly increased the interest rate by 0.1%/year for long terms. The highest rate at this bank is 5.9%/year for 3 terms of 18 months, 24 months and 36 months.

Meanwhile, Mr. Hong Lam (Ly Thuong Kiet - Hanoi) said that he regularly contacted a teller at the Military Commercial Joint Stock Bank (MB). On April 17, he was informed of the deposit interest rate of 4% - 4.6% for a term of 1 to 3 months. Just 1 day later, on April 18, these numbers increased to 4.4% - 4.7%.

Thus, short-term deposit interest rates have approached the "ceiling" level of 4.75%/year set by the State Bank.

In addition, many other banks also increased interest rates such as: Eximbank, VPBank, Nam A Bank, OCB, GPBank and Agribank .

While interest rates fluctuate strongly in short terms, long-term rates for the super-rich remain high.

Deposit interest rates increase again, short-term rates near "ceiling". Photo: Screenshot.

An Binh Commercial Joint Stock Bank (ABBank) continues to be the bank with the highest interest rate at 9.65%/year. However, this incentive does not apply to the general public but is for the super-rich. Accordingly, only cases of opening new/renewing 13-month term savings deposits with a deposit amount of less than VND 1,500 billion will receive this attractive interest rate.

Vietnam Public Joint Stock Commercial Bank (PVcomBank) continues to rank second in the list of banks with the highest savings interest rates at 9%/year, applied for a 13-month term. The minimum deposit balance for this interest rate is VND2,000 billion.

Banks need to “sacrifice” profits

Responding to reporters from Cong Thuong Newspaper, Dr. Nguyen Tri Hieu, a banking and finance expert, said that there are two main reasons why interest rates are increasing again.

Firstly, credit is currently being pushed out, so banks need to mobilize capital to lend more. Specifically, according to the latest data released by the State Bank, by the end of the first quarter of 2025, credit growth reached 3.93%, 2.5 times higher than the 1.42% in the same period last year when lending interest rates continued to decrease by 0.4%.

Second, many people are pouring money into gold as the price of gold increases rapidly. For banks, this is something they are very concerned about. There may be a situation where people withdraw money from banks to buy gold, thereby causing banks to lack capital to mobilize for lending. Therefore, savings interest rates are adjusted up to be more attractive.

When deposit interest rates increase, the possibility of lending interest rates increasing is very high. This is a signal going against credit. This year, the credit growth target is 16% to achieve the GDP growth target of over 8%.

Meanwhile, according to Mr. Hieu, the current capital demand of enterprises is very large. In the immediate future, the macro- economic situation will still have many difficulties, so enterprises want banks to reduce lending interest rates.

Credit is being pushed out so banks need to mobilize capital to lend more. Photo: Screenshot.

How can we reduce lending rates while deposit interest rates increase? Mr. Hieu assessed that this is quite difficult but not impossible. Sacrificing profits is what banks should do.

Mr. Hieu said that banks measure profits through the Net Interest Margin (NIM) indicator. The average NIM in the industry is 3%. When deposit interest rates increase, instead of increasing lending interest rates, banks can reduce other costs. This depends on the capacity of each bank.

However, Mr. Hieu affirmed that for large banks, there is no need to sacrifice profits, they still have room to reduce lending rates. In addition to cutting costs, banks also have the tool "Credit Risk Provision Cost".

“Banks usually have a very large amount of credit risk reserves. This year, they can completely cut this target to maintain profits. But this is something that small banks cannot do because their reserves are not large compared to their scale,” Mr. Hieu analyzed.

However, Mr. Hieu emphasized that from now until the end of the year, reducing interest rates is not easy because it is related to exchange rates. The issues of interest rates, exchange rates, and foreign trade are closely related. The State Bank needs to have measures to reconcile, be flexible, and balance economic indicators to create harmony for all monetary and fiscal policies to maintain the growth target of 8% this year.

The State Bank forecasts that in 2025, interest rates will increase slightly but continue to maintain a low level; Lending interest rates are expected to remain stable in the first half of the year before increasing again in the final period of the year.

Hoang Quyen

Source: https://congthuong.vn/lai-suat-huy-dong-tang-tro-lai-ky-han-ngan-sat-tran-385258.html