Deposit interest rates below 8% at all Vietnam banks

Interest rates on 12-month deposits have fallen below 8% at all commercial banks in Vietnam following Prime Minister Pham Minh Chinh’s call for lower rates on loans.

Starting Friday, the highest interest rates on 12 month deposits are 7.8% at Bac A Bank and 7.75% at GPBank. It is 7.7% at PVCombank, Bao Viet Bank, Nam A Bank and VietBank.

The lowest rate is 6.3% at state-controlled Agribank, VietinBank, BIDV and Vietcombank, also known as the “Big 4” lenders accounting for more than half the credit in the economy.

For six-month deposits, the highest interest rate is 7.6%, at Bac A Bank and VietBank. Corresponding rate at GPBank is 7.55% while ABBank and Eximbank offer 7.5%.

The “Big 4” banks have the lowest interest rate in the market for six-month deposits at 5%.

For term deposits between one to three months, the maximum interest rate is 4.75% at all banks except the “Big 4”, where the rate is 3.4% for one-month deposits and 4.1% on three-month deposits.

Interest rates are higher for deposits of longer than 12 months, but still below the 8% threshold. Bac A Bank provides the highest interest rate of 7.9% for 36-month deposits, while the highest rate offered for 13-mont deposits is offered by Bao Viet Bank at 7.9%. The “Big 4” offer just 6.3% for 13-36 month deposits.

In late June, GPBank and Saigonbank were the only banks in Vietnam offering annual interest rates of 8% or more for term deposits, bucking the sector’s trend of cutting interest rates. GPbank offered 8% interest for 12-month deposits and 8.1% for deposits of 13-36 months. Saigonbank provided 8% for term deposits of 13 months and more.

The central bank is expected to deliver one more 50-basis point rate cut in the current easing cycle, sometime in the third quarter, to further support the country’s growth, HSBC Vietnam has said in its latest national economy analysis.

On Thursday, at a working session with the Vietnam Association of Small and Medium Enterprises, Prime Minister Pham Minh Chinh asked the banking sector to implement a more eased and flexible monetary policy by raising the money supply; reducing the interest rates, including the loan interest rates; and improve businesses’ access to credit.

The prime minister acknowledged the banking sector has reduced the interest rates. For instance, the State Bank of Vietnam (SBV) cut its refinance and discount rates by 50 basis points from June 19, the fourth policy rate adjustment this year.

However, Chinh asked the sector to further reduce loan interest rates and set easier conditions for loans. He also requested the sector to monitor implementation of Circular 02 on debt restructuring and Circular 03 on the buyback of corporate bond to make suitable moves if needed.