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Thursday, June 13, 2024

Savings rates decline further

The Saigon Times

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HCMC – Commercial banks have continued savings interest rate cuts, with BIDV taking the lead by reducing rates by 10 to 20 basis points across all tenors.

For deposits ranging from one to two months, the interest rate has dropped from 1.9% to 1.7% per year. Similarly, the rate for deposits held for six to nine months has been decreased from 3.2% to 3.0% per year.

Customers depositing their money for 12 to 18 months now earn 4.7% per year, down from the previous 4.8%. The most significant reduction applies to deposits held for 24 to 36 months, with rates falling from 5.0% to 4.8% per year.

With this adjustment, BIDV’s highest deposit interest rate no longer reaches 5% per year, aligning it with the rates offered by Agribank and Vietcombank.

VietinBank now offers the highest rate among state-run banks for deposits of 24 months or longer, at 5%. Its rates for other deposit terms are currently 10 or 20 basis points higher than those of BIDV, Agribank and Vietcombank.

Some privately-held banks have also reduced their deposit rates by 10 to 30 basis points.

Despite these rate cuts, the amounts of money deposited at banks in Vietnam remains huge, at a new record of VND14 quadrillion, according to the State Bank of Vietnam (SBV).

Data from the SBV indicated that the average interest rate for new deposits has decreased to 3.3% per year, down by 20 basis points against the end of 2023. Similarly, the average lending rate for new loans has also dropped to 6.4% per year. However, interest rates on existing loans remain high.

Banking-finance expert Nguyen Tri Hieu suggested that banks may continue to reduce deposit rates, at least in the first quarter, to create room for more lending rate cuts. This strategy aims to stimulate economic recovery and growth, although the trend may reverse in the second half of 2024.

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