Many banks have cut deposit interest rates after the State Bank of Việt Nam (SBV) lowered the ceiling levels of interest rates from October 1.
At Kienlongbank, rates are now only 3.55 per cent per year on one-month deposits, 3.75 per cent on two-month terms and 3.95 per cent on three- to five-month deposits, down by 0.6 percentage points.
At Nam A Bank, the annual rate for deposits of 14 months is now 7 per cent, down 10 basis points against the previous rate.
Similarly, OCB has lowered its deposit rates for tenors of one month to 3.75 per cent, of three months to 3.9 per cent and of six months to 5.8 per cent, down 0.2 percentage points.
Customers making deposits worth less than VNĐ500 billion (US$21.5 million) for tenors of 12 months at OCB will receive an annual rate of 6.3 per cent. The rate of the 12-month tenor for deposits worth VNĐ500 billion or more is 8.1 per cent.
The SBV reduced a series of key policy rates, with the annual refinancing rate reduced from 4.5 per cent to 4 per cent and the rediscount rate cut from 3 per cent to 2.5 per cent.
The overnight lending rate in the interbank market was also reduced to 5 per cent from 5.5 per cent, while the interest rates for buying valuable papers through the open market were lowered from 3 per cent to 2.5 per cent.
Moreover, the highest rates for non-term deposits and savings of less than one month are now 0.2 per cent per year, while the maximum annual deposit rate for savings of one month to less than six months was cut from 4.5 per cent to 4 per cent.
Apart from this, the highest rates for deposits of one month to less than six months at people’s credit funds and micro credit institutions dropped to 4.5 per cent per year.
According to a report released recently, Saigon Securities Incorporation (SSI) said banks were experiencing abundant liquidity and the Vietnamese đồng in the system was excessive due to the weak credit demand.
SSI cited data from the General Statistical Office (GSO) showing that as of September 22, the mobilised capital in the banking system increased by 7.7 per cent, while credit growth was only 5.12 per cent compared to the beginning of the year, much lower than the 8.79 per cent recorded in the same period last year.
According to SSI’s statistics, the đồng deposit rates have sharply fallen from May until now by a total of 1.2 – 2.5 percentage points across all terms. The rates for terms from one to less than six months at some banks are particularly low at 2.2 – 2.5 per cent per annum.
SSI said the main factor affecting deposit rates in the near future was still credit demand, and it maintained its forecast that the deposit rates would fall further by 0.1 – 0.3 percentage point in the fourth quarter of 2020.
This article was originally published in VNS
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Source: Vietnam Insider