Deposit interest rates continue to fall

As of March 20, there are 10 banks listing interest rates at 5 per cent or more for 12-month terms, including VietBank, SeABank, Sacombank, Saigonbank, and VietABank.

Currently, the highest interest rate for deposits for 12 months is 5.3 per cent, down 0.4 per cent on-month. With shorter terms, such as nine months, the interest rates are between 3–4.8 per cent; while those for six months are between 2–4.7 per cent.

Interest on 13–24 months deposits is up to 5.8 per cent at VietABank, OCB, HDBank, MB, NamABank, Sacombank, Saigonbank, LPBank, and BaoVietBank.

The reduced savings interest rates been in effect since March last year, and banking experts have said that the low-interest rate will remain until the middle of this year, after which it may increase slightly when credit demand increases. However, it is unlikely that interest rates will return to the same high levels as in 2022.

According to the State Bank of Vietnam, as of the end of February, the outstanding credit balance of the entire system decreased by 0.72 per cent compared to the end of last year, affirming that the outlook for loan demand remains gloomy.

Banking experts have mixed views about the foreign exchange situation amid volatile landscape at home and abroad.

Commercial banks have reduced lending rates in favour of business and production activities, but borrowing remains low.

Savers are increasingly concerned about the prospect of lower deposit interest rates. Economic expert Le Xuan Nghia talked to VIR’s Hong Dung about the challenges of reducing such rates in the near future due to uncertainties in adhering to positive principles.

The US Federal Reserve could provide additional clues on Wednesday about how much it will cut interest rates this year, but it is almost certain to leave its key lending rate unchanged for the time being.