Banks hike deposit interest rates on demand for funds, inflation

A customer makes a deposit at a bank in Bình Dương Province.

HCM CITY –  Many banks have increased deposit interest rates by 0.1-0.6 percentage points amid the growing demand for funds.

Last year the average interest rates on bank deposits for six months and 12 months were 4.7 per cent and 5.5 per cent, down half a percentage point from 2020, Bảo Việt Securities said.

The State Bank of Việt Nam said in 2021 rates were at their lowest level in five years.

But rates, especially at small- and medium-sized banks, have increased sharply since the beginning of this month.

Currently the peak rates are 6.5-7.4 per cent.

NamABank offers the highest rate for online savings even for small amounts. Customers depositing money via its e-banking application for 16-36 months can get 7.4 per cent interest. For 12 months it is 6.4 per cent.

Sài Gòn – Hà Nội Commercial Joint Stock Bank (SHB) has increased rates by 0.2-0.4 percentage points. For 36 months the rate is 0.4 percentage points up to 6.5-6.6 per cent. For 12-month terms it has increased from 5.7-5.8 per cent to 6.1-6.2 per cent.

Bản Việt Bank (Viet Capital Bank) has increased rates to a highest of 7 per cent for 24 months if deposited online and 6.8 per cent if deposited at the counter.

Eximbank, VPBank, Techcombank, OCB, SCB, LienVietPostBank, HDBank, and ACB have also increased their rates.

According to data from the State Bank of Vietnam, deposits increased by 1.38 per cent to nearly VNĐ11.2 quadrillion in the first two months of 2022, with individual customers accounting for VNĐ5.46 quadrillion and corporate customers for VNĐ5.63 quadrillion.

Last year deposits by individuals declined as many withdrew to invest in more attractive asset classes amid low deposit interest rates.

Experts said the increase in deposit interest rates comes at a time when credit demand is rising significantly.

Loans outstanding were 5.04 per cent at the end of March from a year earlier as demand for capital grew to serve production and business after a long period of stagnation due to the COVID-19 pandemic.

VNDirect Securities Company said inflationary pressure and fierce competition from other asset classes such as real estate and securities would force deposit interest rates up.

This year it forecasts deposit interest rates to rise by 0.3-0.5 percentage points to 5.9-6.1 per cent. – VNS