Commercial banks cut deposit interest rates to below 8.5%

Commercial banks in Vietnam have reduced their deposit interest rates again to below 8.5% for terms of 12 months or less in line with requests from the Prime Minister and the central bank.

On May 27, Prime Minister Pham Minh Chinh ordered the State Bank of Vietnam to continue instructing commercial banks to further cut lending rates to help ease the current credit crunch in the country's slowing economy.

The central bank was also asked to continue reviewing the disbursement of the two credit packages, namely the VND40 trillion ($1.7 billion) interest rate aid package and the VND120 trillion ($5.1 billion) social housing support package, with more flexible, feasible, and reasonable lending conditions.

He also ordered the central bank to create favorable conditions for real estate developers and housing purchasers to access credit. The move aims to promote the safe, healthy and sustainable development of the Vietnamese property market.

Prior to that, the State Bank of Vietnam (SBV) lowered ceiling interest rates on dong-denominated deposits by another 0.5 percentage points for terms below six months from May 25 to support economic growth. Under the central bank’s decision, deposit interest caps were brought down from 5.5% to 5% per year for terms from one month to below six months.

As a result, since Monday, commercial banks have cut their deposit interest rates by 0.5 percentage points for terms of six months or less, and 0.2-0.3 percentage points for terms of six months or more.

Deposit interest rates beyond 8.5% are rare, with GPBank offering 8.6% for terms of 15 and 18 months.

An 8.5% interest rate is available at GPBank for terms of 12 months, and at ABBank for terms between 18 and 60 months.

Regarding Vietcombank, VietinBank, BIDV, Agribank, or the “Big 4” state-controlled lenders, their deposit interest rates are among the lowest at 6.8% for terms between 12 and 36 months. Their figures for terms of below six months are from 4.1% to 4.6%, below the limit of 5% set by the central bank. Their interest rates for six-month terms are 5.5%.

VPBank, a major private bank, is offering deposit interest rates of 4.9% for terms of one or three months, 7.7% for six-month terms, 7.9% for nine-month terms, and 7.7% for 12-month terms.

Sacombank, another strong private lender, has set deposit interest rates at 5% for terms of one or three months, 6.8% for six-month terms, 7.1% for nine-month terms, and 7.4% for 12-month terms.