Savings interest rate ceiling down to 4.75%

This is the second time in less than a month that the State Bank has reduced the ceiling interest rate for savings under 6 months to 4.75% per year.

These operating interest rates will decrease from June 19. Specifically, the maximum interest rate for deposits with terms of 1 month to less than 6 months will decrease from 5% to 4.75% per year. The maximum interest rate for non-term deposits and deposits with terms of less than 1 month will remain at 0.5% per year.

The overnight lending rate in interbank electronic payments and lending to cover capital shortages in clearing payments with credit institutions also decreased by 0.5% to 5% per year. The refinancing rate decreased by 0.5% to 4.5% per year. The rediscount rate decreased from 3.5% per year to 3% per year.

The ceiling interest rate for short-term loans in VND for priority sectors was also adjusted from 4.5% to 4% per year. The maximum short-term loan interest rate of People's Credit Funds and Microfinance Institutions for these capital needs was reduced by 0.5% to 5% per year.

Operating interest rate (%/year)	Old	New
Interest rate ceiling for deposits from 1 month to less than 6 months	5	4.75
Overnight lending and shortfall financing rates	5.5	5
Refinancing	5	4.5
Rediscount	3.5	3

This decision was made by the State Bank following the policy of the National Assembly and the direction of the Government to reduce the interest rate level, support people and businesses to increase access to capital, and contribute to the recovery of production and business in the context of economic growth difficulties. In addition, the reduction of interest rates by the State Bank is supported by a number of factors such as controlled inflation and guaranteed liquidity of credit institutions.

Thus, in the first half of this year alone, the State Bank has reduced the ceiling interest rate three times. The first time was in early April, the ceiling interest rate from 1 month to less than 6 months decreased from 6% to 5.5% per year, and demand deposits and deposits with terms of less than 1 month decreased from 1% to 0.5% per year. By the end of May, the ceiling interest rate from 1 month to less than 6 months decreased by another 0.5% to 5% per year.

This morning, the Government Standing Committee also requested the State Bank to immediately take measures to reduce interest rates, including lowering the operating interest rate in June. Commercial banks must cut costs to lower deposit and lending interest rates, in order to support businesses and people to restore production and business and promote growth.

Quynh Trang

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