‘Big Four’ slash deposit interest rates to lowest in banking system

Hanoi – The four biggest banks in Vietnam have strongly cut interest rates for many deposit terms to the lowest levels of the year.

From August 23, the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), and the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) reduced their highest deposit interest rates, applicable to deposit accounts of at least 12 months, to 5.8 per cent per year from 6.3 per cent per year.

The rates for one- and three-month deposits were brought down by 0.3 per cent per year to 3 per cent and 3.8 per cent per year, respectively, and that for six-month accounts to 4.7 per cent per year.

At the Vietnam Bank for Agriculture and Rural Development (Agribank), deposit interest rates for different terms decreased by 0.3 - 0.5 per cent per year. The highest rate, 5.8 per cent per year, is only for 12-month deposits.

The rate for deposits of 13 months and over now stands at 5.5 per cent per year. Meanwhile, the rates for one-, three-, and six-month savings accounts are similar to those of the three above-mentioned banks.

Deposit interest rates at the “Big Four” are now the lowest in the banking system. Some other banks such as Eximbank, VIB, MB and ACB have also strongly cut the rates.

Compared to the peak of 9 - 10 per cent per year at the start of 2023, deposit interest rates have fallen sharply after four regulatory interest rate adjustments by the State Bank of Vietnam (SBV).

The SBV’s adjustments aim to create conditions for commercial banks to further slash lending interest rates to support the economy.

Earlier, it had asked credit institutions and branches of foreign banks in Vietnam to continue reducing lending rates for existing and new loans, by at least 1.5 - 2 per cent per year, as ordered by the Government and the Prime Minister to help enterprises and people recover and develop production and business activities.

Reducing interest rates now will not have a significant impact on inflation, according to Dr. Nguyen Tu Anh, director general of the Department of General Economic Affairs at the Central Economic Commission, in a discussion with Angela Nguyen of VIR.

The decline in deposit interest rates has prompted investors to explore alternative investment channels offering higher profits, as the stock market shows signs of recovery and specific segments of real estate prosper.