The US-China trade war escalated, the devalued Chinese Yuan (CNY) had an impact on the dong exchange rate, leading to an increase in interest rate and hard to stop.
The interest rate of 8.6 percent per year was the highest on the market, belonged to Viet Capital Commercial Joint Stock Bank (Viet Capital Bank). Viet Capital Bank applied this interest rate with 24 month term to 60 month term, which did not require the minimum value of deposits. Besides, this bank also had an online savings programme with an interest rate of 8.7 percent on the same period.
In general, banks set the highest interest rate with a term of over 36 months, except Nam A Commercial Joint Stock Bank (Nam A Bank) and An Binh Commercial Joint Stock Bank (ABBank). These were also the two banks with the next high interest rates after Viet Capital Bank, respectively 8.45 percent and 8.3 percent in term of only 13 months. However, to enjoy this level, customers needed to send an amount of 500 billion dong or more.
Vietnam Export Import Commercial Joint Stock Bank (Eximbank) maintained the interest rate at eight percent. The remaining banks were under eight percent. The next high interest rate belonged to Vietnam International Commercial Joint Stock Bank (VIB) with 7.8 percent, followed by Sai Gon Joint Stock Commercial Bank (SCB) with 7.7 percent, Military Commercial Joint Stock Bank (MBBank), Vietnam Maritime JointStock Commercial Bank (MSB) at 7.4 percent to 7.6 percent. Some remaining banks had interest rate of 7 percent. HCM City Development Joint Stock Commercial Bank (HDBank) with six-month term, nine-month term, 12-month term and 13-month term interest rates, plus a maximum of 0.6 percent per year, maximum interest rate for savings deposit of up to 7.7 percent per year.
In order to attract idle money, some credit institutions also issued high interest rate certificate of deposit. VietNam Asia Commercial Joint Stock Bank (Viet A Bank) just announced to issue a deposit certificate with a record high interest rate. Individual customers who purchased a minimum of 10 million dong of deposit certificates with 24-month term would receive a monthly interest rate of 8.38 percent per year, or earn interest at the end of the period up to 9.1 percent per year.
Earlier, some commercial banks issued certificates of deposit at an interest rate of approximately nine percent per year. Saigon Thuong Tin Joint Stock Commercial Bank (Sacombank) issued deposit certificates across the system for individual and institutional customers. Accordingly, customers who bought long-term deposit certificate having a minimum par value of one million dong and a seven-year term (84 months) would receive an interest rate of 8.6 percent per year. Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Saigon-Hanoi Joint Stock Commercial Bank (SHB), Vietnam Maritime JointStock Commercial Bank (MSB) and so on issued deposit certificates for individual and corporate customers to mobilise medium and long-term capital from the market. The highest interest rate could reach 8.9 percent per year.
Notably, VietCredit Finance Company (VietCredit) just issued the third phase deposit certificate with a total face value of one trillion dong. 12-month term deposit certificates could be invested only starting from 100 million dong, interest rate of 10 percent per year. Currently, banks provided medium and long-term loans for businesses with interest rates of 10 percent to 12 percent per year, and finance companies offered consumer loans with high interest rates, 40 percent to 50 percent per year. Therefore, both banks and financial companies were willing to mobilise capital via the certificate of deposit from the market with a high interest rate of nine percent to 10 percent.
According to the regulations of the State Bank of Vietnam (SBV), from 2019, the rate of using short-term capital for medium and long-term loans of banks would decrease from 45 percent to 40 percent. Mobilising over 12-month term deposits was the way of commercial banks to use resources to serve medium and long-term loans. On the other hand, according to Le Xuan Nghia, economist-financial expert, the US-China trade war was escalating and China was forced to devalue the Chinese yuan, causing the dong exchange rate to be affected and putting pressure on interest rates. In order to keep the money mobilised, banks increased interest rate.
In order to attract idle money, banks increased interest rate sharply online compared to depositing at the highest counters up to one percent per year, six-month to 12-month terms.
Specifically, the online savings interest rate of Asia Joint Stock CommercialBank (ACB) was 0.3 percent higher, ABBank was 0.2 percent higher, Vietnam Public Joint Stock Commercial Bank (PVcomBank) was 0.2 percent higher, etc. Recently, Nam A Bank adjusted the interest rate of online savings deposits to 8.2 percent per year and eight percent per year, respectively with 12-month and six-month terms, higher at the counter from 0.4 percent to one percent per year. Online depositors at Nam A Bank enjoyed higher interest rate at the counter up to one percent per year.
Hoang Viet Cuong, director of Business Division of Nam A Bank, said that increasing the savings interest rate online would increase benefits for customers. With the amount not too large, from 50-100 million dong, customers that had chosen the form of online savings would minimise the process and procedures.
One Chief Executive Officer of a joint stock bank said that many people increasingly chose online savings because it was simple and quick, but still ensures security. Therefore, banks applying higher interest rate on online deposit, with many “great” promotions, would attract idle money from people.
Online savings was a deposit product that had been increasingly promoted by many banks to attract customers, especially in the context that banks were increasing capital mobilisation. Just a click or a few touches on a mobile phone or a computer, customers could open the savings book, check the information, finalise or renew in just a few minutes without directly going to transaction counters.
According to Huynh Buu Son, banking expert, the development of digital banks helpep customers access banking services conveniently, quickly and saving time. At that time, Internet Banking, Mobile Banking and so on became a much-chosen transaction channel. If the bank offered more promotions, incentives with high interest rate, it would be able to draw more customers.
