Bank deposit interest rates surpass 10%

NCB is paying the highest interest rate of 10.35% for 12-month deposits of VND1 billion (US$40,300) downwards made online. For six-month deposits it is offering 10%.

Over the past month lenders have increased deposit interest rates frequently, even weekly in some cases.

At least 10 banks are now offering deposit interest rates of more than 9%.

To attract depositors, most have also launched promotions offering higher rates than officially listed.

MSB is offering 9.9% to new clients if they place a deposit of at least VND1 million.

Many, including Kienlongbank, GPBank, BaoVietBank, PGBank, OCB, VPBank, VietBank, Sacombank, and SeABank, are paying over 9% for 12-month deposits.

Public banks are offering around 8% for 12 months.

For periods of below six months most banks are paying around 6%.

Banks lack liquidity and so have had to sharply hike the rates to meet the needs of business borrowers, Nguyen Quoc Hung, general secretary of the Vietnam Banks Association, said.

The director of a large bank said the tightened bond and property markets means some lenders have to steeply increase deposit interest rates to ensure liquidity.

In the last two months, interest rates on deposits of six months or more have increased by 1.5-2.5 percentage points, leading to higher lending interest rates.

Floating interest rates are predicted to soon surge to 15% a year for individual borrowers and to 11-12% for businesses.

Now they are around 13% and 9%.