Bank deposit interest rates keep falling

The deposit interest rate list at a Saigon Joint Stock Commercial Bank branch in HCM City’s District 3 on May 8. (Photo: VNS)

HCM City (VNS/VNA) - Banks have been steadily cutting deposit interest rates, which have reached around 8%, a move aimed at reducing lending rates to support businesses.

The highest listed rate for 12-month deposits is around 8% per year.

Larger private banks have cut the 12-month rate to below 8%. SHB, Techcombank, ACB, and MB pay between 7.3% and 7.9%.

The four State-owned banks – Agribank, BIDV, Vietcombank, and Vietinbank – continue to pay the lowest rates in the market, around 6% for six to less than 12 months and 7.2% for 12 months.

Smaller banks have also reduced rates significantly since last month.

For 12 months, Bac A Bank’s rate has fallen from 8.6% to 8.3%; KienlongBank’s from 8.5% to 8.2%; and SaigonBank’s from 8.3% to 8%.

Deposit interest rates have been creeping downwards, especially after the central bank cut the operating interest rates on March 15 and April 3.

At the end of last year, almost all private banks offered more than 9% for 12-month deposits. Smaller banks paid 10% or more.

The high deposit interest rates pushed up lending rates to 13-14%, putting huge pressure on businesses.

According to VNDirect Securities Company, deposit interest rates will continue to fall until the end of 2023, tracking sluggish credit demand due to a slump in economic growth and the property market.

It also said the Government would increase public spending this year to pump more money into the economy.

It expected the 12-month deposit rate to fall to around 7% by the end of 2023.

The high lending interest rates are burdening businesses amid declining export orders and weak domestic demand.

But the falling deposit interest rates have raised hopes of a drop in lending rates.

At a meeting last week, central bank deputy governor Dao Minh Tu urged banks to cut operating costs and improve administrative procedures to reduce lending interest rates.

Vietcombank reduced lending rates by 0.5 percentage points last week.

Earlier, Agribank cut them by 1.5 percentage points for dong loans and 1 percentage point for dollar loans.

According to the central bank, deposit interest rates have decreased by 1-1.2 percentage points since the end of last year and loan interest rates by 0.5-0.65 percentage points.

In a related move, the central bank has instructed commercial banks to roll over debts and keep debt classifications unchanged./.

VNA