Customers make transactions at a Vietcombank office in Hanoi. (Photo: tapchitaichinh.vn)
Vietcombank has announced a new interest rate list this week thatsurprised the market. Accordingly, the bank’s interest rate for short-termdeposits from 1-2 months is currently only 1.9% per year, a decrease of 0.3percentage points compared to the previous week. This is the new bottom ofdeposit interest rates in the market. The interest rate for long-term depositsof 12 months or more at Vietcombank remains at 4.8% per year.
Among the four largest State-owned banks, including Agribank,Vietcombank, VietinBank and BIDV, Vietcombank currently applies the lowestdeposit interest rates.
Agribank follows with a deposit interest rate of 2.2% per year forshort-term deposits of 1-2 months. If customers deposit 12 months or more, theinterest rate at Agribank is 5% per year and the highest is 5.3% per year for a24-month term.
VietinBank and BIDV apply the same interest rate for 1-2 monthdeposits at 2.3% per year. Customers depositing for a term of 3-6 months at thetwo banks will receive an interest rate of 2.9% per year. The highest interestrate at the two banks is 5.3% per year when customers deposit for 24 months ormore.
Interest rates have dropped to low levels, making many depositorswonder which term to choose because interest rates for terms of 6 - 12 monthsor more do not differ too much. Even at some small-sized banks, which used tooffer deposit interest rates of 9-10% per year about a year ago, the rate is currentlyalso only around 5-5.5% per year.
According to industry insiders, capital mobilised from the end of2022 with high interest rates of 9-10% per year has almost matured. Therefore,capital raised at lower prices in 2024 will help lending interest ratesdecrease faster this year.
Vietcombank Securities Company (VCBS) said deposit interest rateshave dropped deeply and there is little room for further reduction. However, inthe period when the economy is recovering, the current low deposit interestrates need to be maintained to pull lending interest rates down further.
According to Dr. Nguyen Van Thuan from the University of Financeand Marketing, an interest rate of 5% per year or more for 6-12 month depositsis reasonable as it is higher than next year's 4-4.5% inflation target toensure a profit for depositors. Banks must maintain deposit interest rateshigher than the inflation rate to attract depositors to meet the capital needsof the economy.
VCBS forecasts lending interest rates may decrease by another1-1.5 percentage points in 2024. Banks will consider further lowering lendinginterest rates for some firms, which have good business prospects, to help theborrowers restructure debts and overcome difficult times.
Dr. Do Thien Anh Tuan, lecturer at the Fulbright School of PublicPolicy and Management, said the lending interest rate in 2024 will likelydecrease in accordance with the recent declining rate of savings.
Tuan suggested that at this time, firms should be decisive inaccessing cheap capital when the domestic and foreign economies show signs ofrecovery.
Monetary policy needs to be managed appropriately in the directionof balancing the capital needs of firms and the savings needs of people. Fromthere, the State Bank of Vietnam will maintain interest rates at a reasonablelevel to promote credit with an aim to support economic growth, Tuanproposed./.
VNA
