Dong savings rates rise to new highs
The Saigon Times Daily
HCMC - Interest rates for savings in Vietnamese dong have unexpectedly shot up, with certificates of deposit (CD) carrying an interest rate of up to 9.2% a year, according to a Vietnamnet report.
Less than two months after its offering of attractive interest rates, some 10 basis points higher than previous levels, VPBank has hiked interest rates sharply.
Instead of 7.5-7.9% applicable from January 1, VPBank on March 9 began offering an interest rate of 9.2% for individual clients who receive interest upon maturity but to enjoy this rate, customers must put over VND5 billion in their savings accounts with a 60-month tenor. For other tenors, interest rates range from 7.5% to 9.1%.
Many other commercial joint stock banks in the past two weeks have revised up their interest rates for all terms, especially long ones.
Sacombank has launched a program offering an interest rate of 8.88% for seven-year certificates of deposit and 8.48% for the five-year tenor. LienVietPostBank plans to raise trillions of Vietnam dong, so it offers deposit interest rates of up to 8.8%.
Recently, Eximbank began calling for savings of 24-36 months with an interest rate of 8% which is paid upon maturity. NCB has adopted similar interest rates to lure depositors.
Most CDs come with tenors of several years but some banks such as VietABank borrows for a period of six to 18 months with an interest rate of up to 8.2%. The face value of such CDs has also been brought down to around VND1 million each.
Certain banks such as DongABank and Saigon Commercial Bank (SCB) have even rolled out attractive interest rates of 5.4-5.5% for short tenors of 1-4 months. Deposits of 6-9 years attract an annual return of 6.9%.
State-run banks like Vietcombank, VietinBank, BIDV and Agribank are now applying lower interest rates but as high as 4.3-4.8% for 1-4 month terms. The average interest rate offered by this Big Four is about 50 basis points lower than joint stock banks.
In recent years, banks have kept deposit rates at low levels, sometimes below 5% per year. With the latest market development, lending rates will certainly soar in the coming time.
Huynh Minh Tuan, head of brokerage at the HCMC branch of Vndirect Securities, said it was inevitable that deposit rates had edged up across the board. To raise new capital for the new year, banks have had no other choice but to hike interest rates.
In addition, the U.S. dollar has been strengthening against the Vietnamese dong since U.S. interest rates were recently hiked by the Federal Reserve, leading to Vietnam dong interest rates to inch up.
Tuan noted that when the greenback rises, interest rates for both savings and loans in the local currency will rise to new levels that are about one percentage point higher than previously.