Deposit rate touches two-year high of 8 percent hinh anh 1Some commercial banks have continuously increased interest rates to attract depositors (Photo: VNA)

Hanoi (VNA) – Some commercial banks have continuously increased interest rates to attract depositors, setting a record two-year high of 8 percent per year.

Eximbank last week increased its deposit rate from 7.5 percent to 8 percent per year for some terms. The new rate was applied for deposits of at least 10 billion VND (450,000 USD) with 36 month term.

The Orient Commercial Joint Stock Bank (OCB) has also just listed the same rate for 36-month deposits. The bank even offered an additional 0.1 percentage points per year for depositors those make online savings.

SeABank is also offering the 8 percent rate for 13-month deposits, however, beneficiaries must be the bank's regular customers for five years with deposits of at least 200 billion VND.

Currently, other commercial banks list their highest rate between 7.4 percent and 7.5 percent per year for long-term deposits.

Under the current regulation, the central bank sets the cap of 5.5 percent per year only for short-term deposits of under six months. The rates for medium- and long-term deposits are float.

According to a report from the Capital and Monetary Business Department under the Bank for Investment and Development of Vietnam (BIDV), the speed of capital mobilisation this year can be improved slightly compared with 2015, reaching about 16 percent to 17 percent.

The reason was that the real savings rates of the dong still remained as attractive as expected and inflation was controlled to a low level, BIDV researchers said. At the same time, the recovery of other markets had not been completely stable.

In addition, the central bank may inject more money to boost credit and stimulate economic growth.

Banks said that besides aiming to restructure their facilities to have more long-term capital sources, the deposit rate hike is also expected to help them retain their customers.

However, experts were concerned that it could initiate a rate hike race among banks to attract depositors. The deposit rate hike could also cause a rise in lending rates next time as input costs of banks increase.

Earlier, in the first month of the year, the central bank required credit institutions to obey legal regulations on deposit interest rates to ensure safety of institutions and stabilise the local monetary market.

The central bank said that credit institutions are not allowed to use ‘technical measures' as a loophole to indirectly exceed the central bank's rate cap. The central bank prohibits any unhealthy competition in the capital attraction of credit institutions.-VNA