Deposit interest rates hit both a low and a high of 11%.

Deposit interest rates have just hit a new low…

From the beginning of 2023, interest rates started to cool down. In particular, in the final days of 2023, there were continuous downward adjustments. And that wasn't all; even before the first month of 2014 was over, interest rates simultaneously hit new lows.

At Vietnam Foreign Trade Commercial Bank ( Vietcombank ), interest rates have been lowered to very low levels: only 4.7% per year for terms over 12 months, 3% for 6-month terms, and only 0.2% for 1 and 2-month terms.

Meanwhile, the highest rates at the Vietnam Investment and Development Bank (BIDV), Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), and Vietnam Bank for Agriculture and Rural Development ( Agribank ) are all 5.3% per year for long-term deposits.

Deposit interest rates are both at the bottom and at the top (Figure 1). — Deposit interest rates continued to hit new lows but also reached new highs, with the highest rate reaching 11% per year. (Illustrative image)

Joint-stock commercial banks also lowered interest rates below 5% per year, such as An Binh Commercial Joint Stock Bank (ABBank) with 4.8% per year (6-month term), Saigon Commercial Joint Stock Bank (SCB) with 4.75% per year, and Vietnam Maritime Commercial Joint Stock Bank (MSB) with 4.3% per year.

The prevailing interest rate range is from 5% to under 6%. Only a few institutions list interest rates of 6% per year or higher, such as 6% at National Commercial Bank (NCB), Orient Commercial Bank (OCB), and Ocean Bank; 6.1% at Ho Chi Minh City Development Bank ( HDBank ); and 6.2% per year at Military Commercial Bank (MB).

In its latest report, VNDirect Securities Company forecasts that the State Bank of Vietnam may consider further cutting the policy interest rate by 0.5% in the second quarter of 2024, bringing the refinancing rate to 4.0% and the discount rate to 2.5%.

In 2024, the average 12-month deposit interest rate is projected to remain low at 4.5-5% per annum. The average lending interest rate will decrease further by 0.5-1% due to lower funding costs for banks.

...Just reached its peak

Interest rates are attracting attention as they have both hit a low and a high point.

Over the past several months, despite continuously falling interest rates, the 10% annual rate has been maintained for high-value deposits.

Vietnam Public Commercial Bank (PVComBank) consistently maintains the highest interest rate of 10% per year for 12-month and 13-month terms. To enjoy this offer, customers need to deposit more than 2,000 billion VND.

From January 15, 2024, Vietnam Technological and Commercial Bank (Techcombank) will apply a new interest rate schedule. Accordingly, the highest rate at this bank will only be 4.7%/year, applicable to terms of 12 months or more.

However, Techcombank still maintains a preferential interest rate of up to 9.5% per year for customers with deposits exceeding VND 999 billion, with a 12-month term and a commitment not to withdraw the deposit early.

Another bank that also offers incentives for high-value deposits is Ho Chi Minh City Development Commercial Bank (HDBank).

Effective January 16, 2024, HDBank announced a new interest rate schedule. Accordingly, for regular customers, the highest rate decreased from 0.2% to 6.2% (18-month term). Interest rates for other terms also decreased by approximately 0.2%.

For ultra-high-net-worth customers, HBank reduced interest rates by 0.2% to 8.2% per year. This offer applies to 13-month term deposits with contract values exceeding 300 billion VND. The second highest rate is 7.8% per year, applicable to 12-month term deposits with values exceeding 300 billion VND.

Wooribank, a South Korean bank, has attracted the most attention by introducing a savings package with an interest rate of up to 11% per year. This is the highest rate in the entire market at the moment.

To qualify for this offer, customers must deposit a minimum of 2 million VND and a maximum of 5 million VND per month. Furthermore, customers must commit to making deposits for 2 years. For a 12-month term, the highest interest rate offered is 10% per year. If customers choose a 6-month term, the highest interest rate is only 9% per year.

For regular term deposit packages, the highest deposit interest rate is 5.6% per year for terms from 12 months to 24 months. For terms under 12 months, the deposit interest rate is 5.5% per year.

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