Bank deposit interest rates "fall" to record lows

The interest rate table for savings deposits at banks in early November shows that deposit interest rates continue to decrease, with a common decrease of 0.1% - 0.5%. The reduction in deposit interest rates by banks is expected to continue to be a premise for banks to reduce lending interest rates, promoting economic growth at the end of the year.

A survey of several banks showed that the common deposit interest rate for a 12-month term is 5-6%, a sharp decrease from 9-10% at the beginning of the year. Many banks have lowered their deposit interest rates to even lower than during the Covid-19 pandemic.

On November 10, Joint Stock Commercial Bank for Foreign Trade of Vietnam ( Vietcombank ) updated its new deposit interest rate schedule with a reduction of 0.1% - 0.2% in both short and long terms.

Specifically, the 1-month deposit interest rate decreased by 0.2% to 2.6%/year. The 3-month interest rate also officially dropped below 3%, listed at 2.9%/year.

Similarly, Vietcombank's 6-month and 9-month deposit interest rates decreased by 0.2% to 3.9%/year. In addition, the interest rate for deposits with terms of 12 months or more was only 5%/year, down 0.1%.

Vietcombank's counter deposits and online savings deposits have the same interest rates.

Thus, Vietcombank has reduced interest rates 4 times in the past 2 months (September 14 - October 3 - October 20 and November 10). The total reduction is nearly 1%/year.

Thus, Vietcombank has reduced interest rates 4 times in the past 2 months, since mid-September. This is also the second time in the past 20 days that Vietcombank has reduced deposit interest rates and is currently the bank applying the lowest interest rate in the Big 4 group. BIDV, VietinBank, and Agribank are all applying an interest rate of 5.3%/year for customers depositing savings at the counter for a term of 12 months or more. For short terms, the interest rates of these 3 banks are also about 0.3%-0.4% higher than Vietcombank.

According to the consolidated financial report for the third quarter, Vietcombank recorded a high growth of 8.4% in customer deposits compared to the beginning of the year, reaching nearly VND1.35 trillion. Meanwhile, customer loans increased by only more than 2.7%, reaching VND1.15 trillion.

In the two recent interest rate cuts by Vietcombank, the remaining state-owned commercial banks (Agribank, VietinBank, BIDV) have not yet made similar moves.

Specifically, Agribank, VietinBank, and BIDV are all applying a maximum interest rate of 5.3% per year for terms of 12 months or more. For short terms, the interest rates of these three banks are also about 0.3-0.4 percentage points higher than Vietcombank. Specifically, the 1-2 month term is 3% per year, the 3-month term is 3.3% per year, and the 6-month term is 4.3% per year.

Also on the trend of decreasing interest rates, since the beginning of November, a number of private joint stock commercial banks have also reduced deposit interest rates.

Specifically, PVCombank has also just sharply reduced interest rates for all terms. Specifically, the 1-5 month term has been reduced by 0.3 percentage points to 3.65%/year. The 6-9 month term has also been sharply reduced by 0.5 percentage points to 5.6%/year.

Interest rates for the remaining terms were also adjusted down by 0.5 percentage points compared to before. The 12-month term also lost the mark of over 6% to fall back to 5.6%/year. Interest rates for deposit terms from 18-36 months decreased from 6.5% to 6%/year.

VietBank reduced interest rates by 0.2 percentage points for terms of 15-36 months. Deposit interest rates for these terms have all dropped to 6.2%/year. Interest rates for terms under 15 months remain unchanged and are all below 6% after the adjustment on November 7.

Thus, since the beginning of November, 16 banks have reduced deposit interest rates, including ACB, Bac A Bank, Bao Viet Bank, Dong A Bank, Kien Long Bank, Nam A Bank, NCB, Techcombank, PG Bank, PVCombank, SHB, Sacombank, VIB, VietBank, VPBank and Vietcombank.

Although deposit interest rates have dropped sharply, according to statistics from the State Bank, as of August, deposits among residents have still increased sharply, despite the sharp drop in deposit interest rates since March.

By the end of August, the amount of people's deposits in the banking system continued to reach a record level of more than VND 6.43 million billion, an increase of nearly 9.7% compared to the end of 2022.

As for lending activities, according to the latest statistics from the State Bank, by the end of September, the ratio of credit granted to mobilized capital of the entire system reached 76.7%. In other words, the bank has 100 VND of capital but can only lend out 76.7 VND. This ratio is much lower than the ceiling of 85%.

The mobilized capital of the state-owned commercial bank sector is 82.23%; of the joint-stock commercial bank sector is 78%; of the joint-venture and foreign bank sector is 42.5%.

TM (synthesis)

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