According to the Decision 2415/QD-NHNN dated November 18th 2019 of the State Bank of Vietnam (SBV) on the maximum interest rates for the dong deposit rates of organisations and individuals at credit institutions (CIs), deposit interest rates on terms of six months or more will be determined by CIs based on market supply and demand. After this decision, banks began to adjust interest rates. Notably, not only short-term interest rates, the rates for long terms from nine to 12 months have also seen unexpected changes, with decrease of up to 0.7 percentage point at some banks.
After about one week from the SBV’s decision on interest rate cap, most banks have introduced new interest rate table with changes in different terms. Survey at 21 commercial banks showed that the highest nine-month dong deposit rate has reached 7.96 percent per annum, compared to the highest level of 7.5 percent per annum in early October. In contrast, the 12-month rate has declined from 8.5 percent per annum in early October to only 8.15 percent per annum.
The survey results showed that only three banks raised nine-month savings rate. Specifically, National Citizen Commercial Joint Stock Bank (NCB) raised the rate by 0.46 percentage point to 7.96 percent per annum, being the highest nine-month rate in the system. An Binh Commercial Joint Stock Bank (ABBank) increased the rate from 6.8 percent to 7.2 percent per annum. In addition, Vietnam Technological and Commercial Joint Stock Bank (Techcombank) increased the rate by 0.3 percentage point for customers aged over 50 when depositing from three billion dong, reaching 6.2 percent per annum from 5.9 percent per annum. The bank cut the rate by 0.1 percentage point for customers aged below 50 when depositing less than one billion dong.
Not only Techcombank, 10 other banks have lowered the nine-month deposit rates. for example, Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), Vietnam Prosperity Commercial Joint Stock Ban (VPBank) and Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV) both lowered the rate by 0.3 percentage point compared to the rate listed in early October 2019, reaching 6.4 percent per annum at Sacombank (from 6.4 percent per annum), 6.8 percent per annum (from 7.1 percent per annum) and 7.1 percent per annum (from 7.4 percent per annum) at VPBank, depending on the deposit value. BIDV also cut the rate from 5.6 percent to 5.3 percent per annum.
Following closely behind were six banks including Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank), Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank), Commercial Joint Stock Bank for Agriculture and Rural Development of Vietnam (Agribank), Tien Phong Commercial Joint Stock Bank (TPBank), Vietnam International Commercial Joint Stock Bank (VIB) and Asia Commercial Joint Stock Bank (ACB) all lowered nine-month deposit rate by 0.2 percentage point. Military Commercial Joint Stock Bank (MBBank) slightly adjusted the rate from 6.5 percent to 6.4 percent per annum.
The 12-month deposit rate has also recorded unexpected changes. Many banks maintained the nine-month deposit rate but adjusted the one-year rate. Specifically, at ABBank, the current 12-month rate is only 7.8 percent per annum, deeply down by 0.7 percent compared to the 8.5 percent per annum in early October; while the decrease was 0.4 percentage point at VIB, 0.31 percentage point at Nam A Commercial Joint Stock Bank (NamABank), and 0.3 percentage point at VPBank.
Banks that decreased 12-month deposit rate by 0.2 to 0.25 percentage point included Construction Bank, BIDV, ACB and VietinBank.
Notably, Techcombank previously offered the same rate of 6.5 percent per annum for all customers depositing capital on 12-month. However, after the decision on November 18th, significant changes have been made. For customers of less than 50 years old, the rate is ranging from 6.1 percent to 6.3 percent per annum. Meanwhile, customers of more than 50 years old are offered a higher rate of around 6.5 percent to 6.7 percent per annum, depending on the deposit amount.
In addition, Export Import Commercial Joint Stock Bank (Eximbank) and NCB also slightly lowered 12-month rate by respectively 0.1 percentage point (from 7.8 percent per annum) and by 0.02 percentage point to 7.98 percent per annum.
In contrast to the downtrend, two banks including HCM City Development Commercial Joint Stock Bank (HDBank) and Vietnam Public Commercial Joint Stock Bank (PVcomBank) raised the rate on 12-month term. HDBank increased the rate by 0.1 percentage point to 7.3 percent per annum, while PVcomBank raised the rate to 7.9 percent per annum for accumulated savings and 7.99 percent per annum for public savings.
Data show that Ocean Bank, Dong A Bank, Viet A Commercial Joint Stock Bank (VietABank), Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank), Saigon Hanoi Commercial Joint Stock Bank (SHB) and Saigon Commercial Joint Stock Bank (SCB) keep their nine-month and 12-month deposit rates unchanged, respectively fluctuating from 6.2 percent to 7.2 percent per annum and 6.8 percent to 7.8 percent per annum.
In addition, some other bank also maintain the same rate for one of these two terms.
The interest rate fluctuations in recent time have expanded the interest rate range to 5.5 percent7.5 percent per annum on nine-month term, and 6.1 percent8.15 percent per annum. Banks that take the lead in deposit rates are NCB, Construction Bank, ABBank, etc.
Experts recommended that if depositors do not intend to use money within six months or more, they can deposit on six months or more to enjoy higher interest rates instead of the ceiling rate of five percent as for terms of less than six months. Customers can also consider choosing reputable banks with good interest rates as a safe and effective investment channel for savings.
