The latest deposit interest rates recorded at banks since the end of August show that most banks have sharply reduced savings interest rates compared to July. In particular, the decrease mainly focuses on terms below 12 month.

Low interest rates

According to a survey by Zing, for terms of less than 6 months, over 20 banks have reduced deposit rates in August. The popular reduction fluctuates between 0.1-0.3 percentage points / year. Particularly, some banks sharply reduced this short term interest rate, such as Baovietbank, down 0.5% for 1 month term deposits, from 4% in July to 3.5% at the end of August. SCB Bank, SeABank , LienVietPostBank and Kienlongbank both reduced interest rates for 1 month term deposits, fluctuating around 3.7-3.95% / year.

Notably, Techcombank, after a long period of lowering deposit rates, continued to bring short-term interest rates to a record low. If depositing less than 1 billion dong with 1 month term at this bank, customers only receive the interest rate of 2.85% / year, the lowest on the market today. The highest 1-month term interest rate at this bank is only 3.3% with priority customers depositing over 3 billion dong. Compared to July, the 1-month term deposit interest rate at Techcombank has dropped by over 0.5 percentage points.

Some banks sharply reduced deposit rates compared to July.

For 3-month term deposits, the biggest decrease is also around 0.5 percentage points / year at Techcombank (currently at 3.05-3.4% for ordinary customers and 3.3-3.5% for customers priority). July Eximbank listed 3-month term deposit interest rate at 4.25% so far has also decreased to 3.8% / year.

Savings interest is reduced by nearly 1% after a month

In the interest rate cut in August, most banks focused on sharp decrease in terms of 6-12 months. It is estimated that there are more than 20 banks reducing interest rates for this term, with the common decrease of 0.3-0.5 percentage points / year.

Notably, the group that dropped sharply in August interest rate was mainly small and medium sized banks instead of big banks like in July.

Big banks often tend to lower interest rates before the market and small banks, said Zing, deputy general manager of a large commercial bank.

In fact, in July, most of the state-owned commercial banks and large private banks reduced interest rates. Therefore, the fact that small and medium banks sharply reduced interest rates in August is to rebalance the deposit rates in the market.

The market has no longer had interest rates on deposits up to 8-9% / year as in the end of 2019 and early 2020. Photo: Quynh Trang.

Also in August, GPBank alone reduced the interest rate by 0.9 percentage point for 6 month term deposits, bringing this term interest rate down to the current 5.9% / year. This is also the bank with the strongest reduction in savings interest rates for 6-month period.

A series of banks also sharply reduced interest rates on this term deposit: Baovietbank (down 0.7 percentage points); Techcombank (down 0.6 percentage points); ABBank, OCB, MSB, PGBank, SHB together (down 0.5 point%).

Similar to the 12-month term, GPBank has decreased from 7% in July to 6.1% currently; PGBank decreased from 6.9% to 6.1%; Baovietbank decreased from 7.92% to 7.22%; ABBank decreased from 7.4% to 6.8%; Vietcapital bank decreased from 7.3% to 6.8%.

Will still decrease until the end of the year

The recent decline in interest rates of banks in the last 2 months has caused the 6-12 month period on the market to drop around 7% / year. Currently, no banks offer interest rates above 8% for savings deposits of 12 months or less (at the beginning of the year, the highest interest rate for less than 12 months was 8.4%).

Not only the small and medium sized private banks, the trend of lowering interest rates was also recorded in the group of state-owned banks in August (Vietcombank, Vietinbank, Agribank, and BIDV), focusing mainly on the term 6-12 month with a decrease of 0.1-0.2 percentage points.

At Vietcombank, the individual deposit rates for terms of 1, 2, 3 and 9 months decreased slightly compared to the previous month, while the interest rates for the remaining terms were unchanged.

It is forecasted that interest rates on savings deposits will fall further from now to the end of the year. Photo: Hoang Ha.

Vietinbank also decreased by 0.1-0.2 percentage point of deposit interest for most tenors of less than 12 months and kept the deposit interest rate for 12 months or more. Similarly, both BIDV and Agribank reduced deposit rates for terms of 1, 2, 3, 5, and 9 months.

According to the deputy general director mentioned above, the fact that banks have reduced the deposit interest rates recently, in addition to the general policy of the State Bank (SBV), also comes from the fact that banks are credit growth in many banks are still low.

Meanwhile, the amplitude between deposit and loan interest is not much. Banks are forced to lower their deposit rates to reduce output rates.

Dr. Nguyen Tri Hieu assessed that the reduction of deposit rates by banks in July-August is positive for businesses and the current economy. Because the net interest margins of banks in the first half of the year have decreased significantly compared to the same period, if the input interest rate cannot be reduced, the bank will not be able to reduce the lending interest rate for businesses.

The expert calculated that banks can reduce the lending interest rate by up to 1 point more from now to the end of the year, but must come with conditions to reduce the input interest rates. In case the State Bank can lower the operating rate again, banks can further reduce the lending interest rates, supporting businesses.

Source: ndh.vn – Translated by fintel.vn