Savings interest rates begin rising amid slowing bank deposits

A screenshot of a savings account with Construction Bank. — VNS Photo Bồ Xuân Hiệp

While some commercial banks continue lowering deposit interest rates, others are increasing the rates, particularly for term deposits of 12 months or longer.

As of early April, six commercial banks have raised their savings interest rates, including VPBank, SHB, Eximbank, HDBank, MSB, and Kienlongbank.

VPBank saw the largest increase, with rates going up from 0.1 per cent to 0.5 per cent across all terms. The highest increase was for the 12-month term, now offering 4.7 per cent per year for deposits at the counter and 4.8 per cent for online deposits.

Other banks such as MSB, SHB, Eximbank, and HDBank also raised their rates by 0.2 per cent for specific terms.

The highest interest rate for deposits under VNĐ1 billion with a 24-month term is currently 5.8 per cent per year.

An employee at an HDBank branch in HCM City’s District 7, who asked to remain anonymous, told Việt Nam News that there has been a slight increase in deposit interest rates for the 12-month and 13-month terms.

The highest increase was seen in the 13-month term, with rates now at 4.9 per cent per year for counter deposits, and 5.1 per cent per year for online deposits.

"Customers who deposit over VNĐ2 billion with a total deposit balance of VNĐ5 billion are eligible for a higher deposit rate of up to 5.6 per cent per year for the 13-month term," she said.

The employee attributed the slight increase in deposit interest rates to the gradual recovery of credit growth in the market.

On the other hand, more than 10 banks have decreased deposit interest rates in recent weeks, including State-owned banks Vietcombank and VietinBank.

Private banks such as Techcombank, ACB, TPBank, VIB, Sacombank, SeABank, ABBank, BVBank, SCB, Oceanbank, and CBBank have also lowered rates by 0.1 per cent to 0.5 per cent.

Despite the decrease in deposits, liquidity in banks remains high, and credit activities had increased at the end of the first quarter, following negative growth in the previous months.

The downward trend in savings interest rates has been ongoing since March last year, with almost all lenders reducing rates across various terms over the past months.

Bank leaders predicted that savings interest rates will remain low until mid-year, with a potential increase once credit growth picks up in the last two quarters of the year.

However, rates may not return to the high levels seen in 2022, due to a run at a private lender in late 2022 that has been taken over by the central bank.