Deposit interest rates at foreign banks lower than domestic peers

While interest rates in the Vietnamese banking system are forecast to decrease in 2023 when macroeconomic conditions improve, the figures among foreign banks and branches in Vietnam are already lower than those of domestic peers.

Right after the Lunar New Year (Tet) holiday, deposit interest rates at many domestic banks cooled down. On the official websites of banks, the rates of more than 10% per year are no longer seen, and instead, the highest levels are 8.6-9.5%.

The rate of 9.5% per year is the ceiling level that domestic commercial banks have committed to at a meeting in late December 2022 amid soaring deposit interest rates, reaching 10-11% per year at a time. The move to reduce deposit interest rates is to support banks to ease lending rates to aid the economy.

Starting February, HSBC Vietnam's deposit interest rates inched up slightly. The highest rates are 0.1% for terms between seven and 21 days; 1% for one-month and two-month terms; 2.25% for three-month terms; 2.75% for terms between six and nine months; and 3.75% for terms of 12, 18, 24, and 36 months. The rates are about 0.25 percentage points higher for premier customers.

The figures of Citibank Vietnam and South Korea-backed Shinhan Bank Vietnam remain unchanged from end-2022. Citibank Vietnam's rates are 0.3% for two-month terms, 0.7% for six-month terms, 0.9% for nine-month terms, and 1% for 12-month terms, except for a promotion of 5% for three-month terms. Citigold customers are offered an additional 0.5 percentage points.

Shinhan Bank Vietnam offers rates at 3.9-6.8%. For two-month terms, the figures are between 3.9% and 4.9% for online or offline deposits. Similarly, the rates are between 4.4% and 5.5% for three-month terms, 5.4% and 6% for six-month terms, 6% and 6.8% for 12-month terms, 5.4% and 6.4% for 18-month terms, 5.4% and 6.2% for 24-month terms, and 5.3% and 6% for terms between 36 and 60 months.

Standard Chartered Bank Vietnam’s figures are slightly increased to between 1.45% and 4.4%. Online deposits of 12 months are subject to a promotional rate of 4.5%. Terms between one and two months see deposit rates of 1.45% and 1.67%, respectively.

Interest rates of 2.3%, 3.5%, and 3.65% are offered for three, six, and nine-month terms. Terms of 17, 18, 24, 30, and 36 months have rates of 4%, 4.1%, 4.2%, 4.3%, and 4.4%, respectively.

The figures at Singapore-invested United Overseas Bank Vietnam are in the range of 5.5% and 7.9%, unchanged from end 2022. Terms of six, nine, 12, 13, and 18 months have interest rates of 7.5-7.9%. One, two, three, and four-month terms are subject to interest rates of 5.5-5.8%.

Versus end-2022, Malaysia-backed Hong Leong Bank Vietnam reduced the rate to 5.5-5.7% for terms between one and three months and 8% for terms between nine and 36 months.

Notably, for Priority Banking customers with deposit of VND3 billion ($127,000) or more, the rate is 8.8% for terms between nine and 36 months and 9% for terms of six months.

Public Bank Vietnam, also a Malaysian creditor, set the rates between 5.8% and 8.8% for terms between one and 60 months for basic customers. An addition of 0.2 percentage points is available for prioritized customers for terms between six and 60 months.

South Korean-invested Woori Bank Vietnam offers deposit rates between 5% and 7% for different terms. Besides, the lender provides a promotion of up to four percentage points, or up to 11% in total.

According to experts, interest rates are likely to fall in 2023 thanks to more favorable macro conditions.

In its recent analysis report,Vietnamese securities broker Bao Viet Securities said it expects interest rates to drop this year, with clearer signs from the second quarter, when the Federal Reserve (Fed) stops raising interest rates and Vietnam's inflation cools down.