By mid-September, the 12-month deposit interest rates at many major banks fell below 6% / year. It is forecasted that in the coming time, the deposit interest rates will continue to decrease further when the system liquidity is still in redundancy.
Deposit rates for 12-month terms were down to a record low
After many sharp declines since the beginning of the year, the 12-month term deposit rates at many banks have dropped below 6% / year, a record low for many years.
From the beginning of September, Techcombank interest rate applicable to 12-month term deposits at the counter, receiving interest at the end of the term has decreased to 4.8% for ordinary customers and 5 – 5.2% / year for preferential customers. Particularly in the form of receiving monthly and quarterly interest, the interest rate is only 4.6% / year and 4.7% / year.
At ACB, the interest rate applied for 12-month term, the interest received at the end of the term also fluctuates from 5.7 to 5.95% / year, depending on the amount of the deposit. The interest rate of 6% / year is only for customers sending from 10 billion dong or more. With the forms of receiving interest on a quarterly, monthly basis and receiving interest in advance, the interest rate bracket applicable to a 12-month term only ranges from 5.3 to 5.8% per year.
12-month term deposits at MSB receive interest rates ranging from 5.3 to 5.9% per annum, on all deposit products. The 7% / year interest rate is only for customers who deposit over 200 billion dong at Highest Interest product.
In addition to the above banks, the maximum deposit interest rate applicable to 12-month tenors of Agribank, Vietcombank, VietinBank and BIDV is also only 6% / year.
At foreign banks, the deposit rates for this term are even much lower.
For example, HSBC, this bank is listing the interest rate of 1.75% for the form of receiving interest at the end of the term and 1.74% for the form of receiving monthly interest. ShinhanBank also mobilizes 12-month deposits at the interest rate of 4.5% / year.
At Standard Chartered Bank Vietnam, 12-month term is only entitled to 0.33% interest rate for normal customers and 0.43% / year for priority customers. The bank applies a much higher interest rate schedule for online deposits when a 12-month term is applied at 1.5% / year.
Deposit rates will continue to decrease further
According to the writer’s statistics, in August alone, deposit interest rates fell by 0.2-0.4 percentage points for short terms and 0 – 0.2 percentage points for long terms. Accumulation of 8 months, deposit interest rates have decreased by a total of 0.5 – 2.1 percentage points for all terms.
Currently, interest rates for deposits are popular at 3 – 4% / year for terms of less than 6 months, 4.2 – 6% / year for terms of 6 to less than 12 months and 5 – 6.7% / year for terms term 12, 13 months. In particular, the deposit interest rates of joint stock commercial banks are mostly higher than that of state-owned commercial banks by about 0.5 – 1.5% / year for all terms, but especially some banks have term deposit rates. 12 months or more is even lower than the state commercial banks like ACB and Techcombank.
Forecasting the trend, analysts say that deposit interest rates will continue to decline in the last months of the year in the context that deposit growth is still higher than credit.
Data from the Ministry of Planning and Investment shows that as of August 26, 2020, new credit growth is 4.23% compared to the end of 2019, while deposit growth is still very good.
In Ho Chi Minh City alone, by the end of August, capital mobilization reached more than 2.66 million VND, an increase of 4.55% compared to the end of 2019 and an increase of 11.6% over the same period. Meanwhile, credit growth in the first 8 months was only about 4% (as reported by the State Bank).
Source: SSI Research
In the recent market report, SSI Securities Analyst (SSI Research) said that the widening mobilization – credit gap makes VND money redundant in the banking system.
This organization expected that the deposit interest rates could fall further by about 0.5 – 0.7 percentage points for tenors less than 12 months and 0.2 to 0.5 point percent for tenors from 12 months or more in last 5 months of 2020.
VNDirect Securities also forecasts that the deposit and lending rates of commercial banks will drop by 0.25-0.5 percentage points in the second half of the year, of which short term deposit rates may drop harder than long terms.
According to Dr. Nguyen Tri Hieu, the deposit interest rate will continue to decrease when the Government and the State Bank maintain the trend of monetary loosening in order to lower interest rates and support economic growth. In addition, banks will also step up to cut deposit rates when the demand for loans is low and liquidity is excess.
“Mobilization is still growing well while credit activities are slowing down, causing the liquidity of banks to be redundant. Therefore, there is no reason for them to keep the deposit rates unchanged”, PhD. Nguyen Tri Hieu commented.
However, this expert also said that the trend of interest rates in the future will depend much on the evolution of the disease. In case the translation is under control and demand for loans recovers, interest rates are likely to turn back to rise again.
Source: vietnambiz.vn – Translated by fintel.vn
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