Commercial banks continue to cut deposit interest rates

A customer deposits at a HDBank’s transaction office in Hà Nội. Many banks, including HDBank, have reduced its deposit interest rate by 0.1-0.2 percentage point per year. — VNA/VNS Photo

HÀ NỘI — Commercial banks have persistently reduced deposit interest rates, resulting in rates for many terms now standing at just above 6 per cent per annum.

In line with this trend, Military Bank (MB) has revised its rates downward by 0.1-0.2 percentage points per year as of 15 August 2023. Significantly, the 12-month term interest rate at MB has fallen to a mere 6.1 per cent per annum. This represents the lowest deposit rate within the banking system, and is even lower than the interest rate for the equivalent term at the four largest State-owned commercial banks: Vietcombank, VietinBank, BIDV, and Agribank.

Interest rates for other terms at MB have been set as follows: 4-4.2 per cent per annum for 1-3 month deposits; 6-6.1 per cent per annum for 6-9 month deposits; and 6.4-6.6 per cent per annum for 13-36 month deposits. Notably, the 6.6 per cent rate is the highest deposit interest rate offered by MB, and this applies to customers making deposits of 24 months or longer in the central and southern regions of Vietnam.

This week has also seen several other banks, including BaoVietBank, GPBank, and VIB, lowering their interest rates by 0.1-0.5 percentage points.

Specifically, the highest interest rate at BaoVietBank is only 7.4 per cent for customers who deposit online for a term of 24-36 months and receive interest at the end of the period. BaoVietBank applies an interest rate of 4.4-4.75 per cent per year for terms of less than 6 months and 6.8-7 per cent per year for a term of less than 12 months.

Similarly, at GPBank, the highest interest rate has decreased by 0.4 percentage points per year compared to last week to only 6.95 per cent per year for terms of 13 months or more when depositing online. Interest rates for 6- and 12-month deposits have also decreased to 6.65 per cent and 7.25 per cent per year, respectively.

At VIB, the highest deposit interest rate was down from 6.9 per cent per year in early August to 6.7 per cent per year currently. The rates for 6-month and 12-month deposits at VIB also see similar reductions to 6.4 and 6.5 per cent per year

Previously, many banks, such as SHB, and HDBank, reduced their deposit interest rate by 0.1-0.2 percentage points per year. In which, SHB applies the online deposit interest rate of only 6.7 per cent per year for the terms from 6 to 8 months; 6.8 per cent per year for terms of 9-11 months and 6.9 per cent per year for terms of 12 months or more.

At VietABank, the interest rate for deposits from 6 to 11 months is 7 per cent per year and 7.3 per cent per year for 12-18 month deposits.

HDBank has also reduced its highest interest rate to 9.1 per cent per year from 9.3 per cent per year as applied previously for customers depositing VNĐ300 billion or more with a term of 13 months. For 13-month deposits worth under VNĐ300 billion, the interest rate at HDBank is 7.35 per cent per year. With a term of 12 months, HDBank applies an interest rate of 8.6 per cent per year for deposits of VNĐ300 billion or more and 7 per cent per year for deposits of less than VNĐ300 billion.

Currently, the deposit interest rate of more than 7 per cent per year is only listed at a few banks such as DongABank, Viet A Bank and NCB. Only DongABank is listing the highest interest rate in the banking market at 8.3 per cent per year, applicable to deposits of more than VNĐ1 billion with 13-month terms.

Deposit interest rates at commercial banks have started to cool down since the end of the first quarter of 2023 and fell deeply after four policy interest rate cuts made by the State Bank of Vietnam (SBV), which is expected to create more room for banks to continually cut lending interest rates.

The SBV early this week also directed commercial banks to continually reduce lending interest rates by 1.5-2 percentage points per year at a minimum for both outstanding loans and new loans.

Under Document No. 6385/NHNN-CSTT, the SBV requires banks to report their commitment to reducing lending interest rates in 2023 for outstanding loans and new loans before August 25 this year and the results of their commitments before January 8 next year.