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Thursday, June 20, 2024

Bank deposits hit record high despite interest rate cuts

The Saigon Times

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HCMC – Deposits at commercial banks in Vietnam had reached an all-time high of over VND12.3 quadrillion in the year to the end of June despite interest rate cuts, according to the State Bank of Vietnam.

A substantial contribution to this surge was personal savings which surpassed VND6.38 quadrillion, up by VND35 trillion against the same period last year.

Deposits by businesses and other organizations also amounted to nearly VND6 quadrillion in the first six months, up by more than VND235.4 trillion over May. This growth halted a five-month streak of declining deposits from corporate clients.

Interest rates have consistently edged down due to the central bank’s back-to-back rate cuts. Four major state-run banks – Vietcombank, VietinBank, Agribank and BIDV – currently offer a maximum interest rate of 5.8% per year for a 12-month term. Interest rates for terms ranging from six months to under 12 months hover around 4-5% per year, down by three to four percentage points compared to early this year.

In late August, several banks announced additional deposit rate cuts. MB Bank lowered deposit rates by 20 to 40 basis points for both short and long-term deposits. Meanwhile, Techcombank decreased deposit rates for terms of six months or longer by 20 basis points.

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