Why banks keep increasing deposit interest rates

According to experts, at the end of the year, lending demand increases sharply, so banks have to increase interest rates to mobilize capital and prepare funds to meet credit growth targets. However, this is not a cause for concern but rather a seasonal factor.

According to statistics in November, there were 16 participants in the race to increase interest rate They are: Kienlongbank, CBBank, SeABank, BaoViet Bank, HDBank, GPBank, LPBank, Nam A Bank, IVB, Viet A Bank, VIB, MB, Agribank , Techcombank, ABBank and VietBank. In which, MB, Agribank and VIB are the bank There have been two interest rate hikes since early November.

ABBank alone has adjusted interest rates three times with increases for terms under 12 months. But ABBank has also reduced interest rates twice. save 12-month term in these adjustments.

Notably, after 2 increases in deposit interest rates applied to both counter and online deposits this month, Agribank is far ahead of the Big 4 group in deposit interest rates for most terms. For example, for terms of 3-5 months, Agribank is mobilizing at 2.9%/year, while VietinBank and BIDV mobilize at 2.3%/year and Vietcombank is 1.9%/year.

A Big 4 bank doubled its savings interest rate this month.

Currently, the average mobilization interest rate is about 6%/year for long terms of 12 months or more. Savings interest rates short term also increased to 4-5%.

Interest rates of over 6%/year with long terms have appeared at many banks such as Ocean Bank, BaoViet Bank, BVBank, HDBank, NCB, ABBank, Bac A Bank, Saigonbank...

Recently, banks are increasing competition to attract customers. deposit Not only by interest rates but also by many promotional programs. There are banks where customers who deposit savings have the chance to win a SH Mode motorbike, MacBook Air M3, iPhone 16.

Data from State Bank show, growth credit As of October 31, it had increased by 10.08% compared to the end of 2023. In addition, the system's on-balance sheet bad debt by the end of September increased by 4.55% compared to the end of 2023, almost equal to the end of 2023 and doubled compared to the 2% level in 2022. This is considered a factor that contributes to banks continuing to adjust deposit interest rates to attract new capital, thereby helping to ensure liquidity.

Talk to PV Tien Phong , Mr. Nguyen Huu Huan - Ho Chi Minh City University of Economics - commented that at the end of the year, the demand for loans increased sharply, so banks had to increase interest rates to mobilize capital, prepare funds to achieve targets growth credit. However, this is not a serious concern but more of a seasonal factor.

Sharing the same view, Mr. Nguyen Quang Huy - CEO of the Faculty of Banking and Finance, Nguyen Trai University - predicted: "From now until the end of the year, mobilization interest rates may increase by 0.3 - 0.5%/year for medium and long-term terms (6-12 months) to meet credit demand and ensure liquidity. Lending interest rates are likely to remain at the current level or only decrease slightly in some priority areas. High-risk areas may have to bear a slight increase in interest rates".

According to Mr. Huy, the fourth quarter of each year is always the time when businesses increase their borrowing for production, business and preparation of goods for Tet. To meet this credit demand, banks need to increase their deposit mobilization to ensure sufficient capital for disbursement, creating pressure to push up deposit interest rates.

“In addition, banks must ensure a minimum capital adequacy ratio. Many banks have reached the lending ratio threshold above mobilization. This forces credit institutions to prioritize increasing mobilization sources to strengthen liquidity, so increasing mobilization interest rates at this time is inevitable," said Mr. Huy.

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