Vietnam Banks Suddenly Slash Deposit Interest Rates

A number of Vietnamese banks have made recent and sudden cuts to deposit interest rates.

A survey of Hanoi’s banking sector has shown that banks have reduced deposit interest rates by 0.3% – 0.8%. Techcombank’s highest current deposit interest rate is just 12% per year, instead of 12.5% previously. Eximbank has applied the highest rates, of 12% per year for 12-month and 13-month terms, a change from the old rates of 12.3 – 12.8%.

Long-term deposit interest rates drop sharply

Vietcombank applies the deposit interest rate for terms of over 12 months at 10% per year. Agribank’s annual rate is 12% for 24-month term and 11% for 12 and 18-month terms.

At smaller banking groups deposit interest rates have been also slashed remarkably. Previously banks were finding ways around regulations concerning interest rate levels by offering other benefits, but that situation has seemed to change.

Long-term deposit interest rates drop sharply

Currently, the deposit interest rate for 12 and 13-month terms at LienVietPostBank is 11% per year, and 11.5% for 24-months. Deposits with terms of more than three years are given interest rates of 12% per year. VIB’s highest long-term deposit interest rate is just 11% annually.

Experts said the banks’ trend of lowering deposit interest rates is reasonable because they have gained better capital ratios.

However, the same experts added that, slashing the deposit interest rate is likely just a temporary shift. A deposit ‘interest rate race’ is forecast to take place early next year as banks ramp up promotions for Tet.

In mid-September, a range of big banks, including ACB, Eximbank and Sacombank, imposed high VND deposit interest rates with 13% by ACB and Sacombank and 12.8% by Eximbank.

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