Deposit rates surge after central bank raises rate ceiling

By Dinh Vu, Tri Duc
Sat, September 24, 2022 | 3:10 pm GMT+7

A slew of small- and medium-size commercial banks have hiked their deposit interest rates by 0.3-1 percentage points after the State Bank of Vietnam raised the deposit rate ceiling Friday.

Per the central bank's decision, the deposit rate ceiling for term deposits from one month to less than six months has increased by 1 percentage point to 5% per year. For demand deposits and those with terms of less than 1 month, the rate ceiling has risen from 0.2% to 0.5% per year.

Broker VNDirect predicted deposit interest rates would continue going up in 2023. Photo courtesy of The Investor/Trong Hieu.

Broker VNDirect predicted deposit interest rates would continue going up in 2023. Photo courtesy of The Investor/Trong Hieu.

The State Bank made the move after the Federal Reserve (Fed) for the third time in a row had raised the benchmark interest rate by 75 percentage points to tame inflation in the U.S.

The deposit rate ceiling hike allows banks in need of capital to pay higher deposit rates to encourage depositors. That also means lending rates might increase in tandem.

Asia Commercial Bank (ACB) announced Friday new rates for term deposits from one month to three months at a maximum 4.4% per year, up 0.4 percentage points. The bank also raised the rate for term deposits of 36 months to 6.9% per year.

Saigon-Hanoi Bank (SHB) raised the rate for term deposits from one month to six months by 0.8-0.9 percentage points to 4.6-4.9%.

The rates for longer-term deposits have also gone up by 0.4-0.5 percentage points. The bank's rate for 36-month term deposits is now at 7.1%.

KienLongBank (KLB) set the new deposit rate for term deposits of between one and six months at a maximum 5% and the figure for 36-month term deposits is 6.95%.

Similar to KLB, Viet Capital Bank (BVB) set 5% interest rate for term deposits of between one and six months. For term deposits of 12 months or more, the highest interest rate is 7.3%.

However, major banks like Vietcombank, BIDV, VietinBank - those with the state as majority shareholder, and leading private lenders like VPBank and Techcombank have yet to raise their deposit interest rates.

Vietcombank and BIDV set their rates for term deposits between one and three months at 3.1-3.4%, six months at 4%, and 12-36 months at 5.6%.

VPBank’s rates for term deposits between one and three months are 3.2-3.6%, six months 5.2%, and 36 months 5.8%.

VNDirect Securities anticipated deposit interest rates may climb by 0.3-0.5 percentage points in the last months of the year from the old levels recorded before the State Bank changed its regulatory interest rates.

Accordingly, the average interest rate for 12-month term deposits at commercial banks might hit 6.1-6.3% by the end of the year, which is still lower than the pre-pandemic 7% rate per year, according to the broker.

VNDirect expected the deposit rate would continue going up in 2023, as the State Bank would raise its regulatory interest rate to rein in inflation and stabilize the exchange rate while commercial banks need more capital for lending activities amid robust economic recovery.

It predicted deposit interest rates may increase by 0.5 percentage points next year, and the rate for 12-month term deposits would rise to 6.6-6.8% per year by the end of 2023, still below the pre-pandemic 7% per year.

Comments (0)
  • Read More
Restructured construction giant Tracodi gets set to execute ambitious plans

Restructured construction giant Tracodi gets set to execute ambitious plans

After changing its name and restructuring as a group, Tracodi Construction Holdings JSC (HoSE: TCD), a member of Bamboo Capital Group (HoSE: BCG), has completed a leadership shake-up and is poised to achieve rapid growth.

Bamboo Capital - Fri, November 1, 2024 | 4:43 pm GMT+7

Philippines requests companies to pay for plastic waste treatment

Philippines requests companies to pay for plastic waste treatment

The Philippines expects its "Extended Producer Responsibility" (EPR) that came into force last year will help it curb plastic waste

Southeast Asia - Fri, November 1, 2024 | 4:30 pm GMT+7

Indonesia warns of rising online terrorism

Indonesia warns of rising online terrorism

Indonesia's National Counter-Terrorism Agency (BNPT) has warned of a shift in terrorism tactics, moving from public attacks to online platforms that target vulnerable groups, particularly women and children.

Southeast Asia - Fri, November 1, 2024 | 4:29 pm GMT+7

Singapore establishes global fintech network

Singapore establishes global fintech network

The Monetary Authority of Singapore (MAS) on Wednesday announced that it has established a “Global Finance & Technology Network” (GFTN) to propel Singapore’s reputation as a premier global fintech hub into its next phase and enhance global connectivity.

Southeast Asia - Fri, November 1, 2024 | 4:28 pm GMT+7

Nokia, Viettel deploy 1.2 Tb/s optics transmission in Vietnam, to help 5G growth

Nokia, Viettel deploy 1.2 Tb/s optics transmission in Vietnam, to help 5G growth

Finnish giant Nokia and Vietnamese telco Viettel have rolled out high-capacity optical network after achieving an optics transmission speed record of 1.2Tb a second per wavelength in Vietnam.

Companies - Fri, November 1, 2024 | 3:40 pm GMT+7

Korea SK Group sells 76 mln shares of Vietnam’s Masan, no longer major shareholder

Korea SK Group sells 76 mln shares of Vietnam’s Masan, no longer major shareholder

South Korea’s chaebol SK Group has sold 76.28 million shares of Vietnam’s conglomerate Masan, lowering its ownership in Masan to 3.67% of the charter capital and 3.86% of the voting shares.

Companies - Fri, November 1, 2024 | 3:16 pm GMT+7

HCMC-based Bamboo Capital's energy arm fulfils 98% of profit target in 9 months

HCMC-based Bamboo Capital's energy arm fulfils 98% of profit target in 9 months

BCG Energy JSC, a subsidiary of Vietnamese private conglomerate Bamboo Capital Group, posted a consolidated after-tax profit of VND504 billion ($19.94 million) in the first nine months of 2024, fulfilling 98% of the year's profit target.

Bamboo Capital - Fri, November 1, 2024 | 2:32 pm GMT+7

Vietnam refinery operator suffers heavy loss in Q3

Vietnam refinery operator suffers heavy loss in Q3

Binh Son Refining and Petrochemical JSC (BSR), the operator of Vietnam’s first oil refinery Dung Quat, incurred a net loss of VND1.21 trillion ($47.74 million) in Q3/2024, marking the fourth consecutive quarter of dim earnings.

Companies - Fri, November 1, 2024 | 2:10 pm GMT+7

Vietnam T&T Group, Qatar partner to build $3.2 bln Disneyland park in Hanoi

Vietnam T&T Group, Qatar partner to build $3.2 bln Disneyland park in Hanoi

Vietnam’s conglomerate T&T Group and Qatar’s JTA International Investment Holding will jointly build a $4.5-billion sports and entertainment complex in Hanoi, featuring a Disneyland theme park worth $3.2 billion.

Real Estate - Fri, November 1, 2024 | 12:08 pm GMT+7

AirAsia to collect mandatory carbon fee starting 2025

AirAsia to collect mandatory carbon fee starting 2025

Malaysia-based carrier AirAsia will begin imposing a mandatory carbon fee on all passengers starting January 1, 2025, according to the country’s Transport Minister Anthony Loke.

Southeast Asia - Fri, November 1, 2024 | 12:05 pm GMT+7

At least seven killed in bridge collapse in Indonesia

At least seven killed in bridge collapse in Indonesia

At least seven people were killed and dozens of others were injured when a seaside bridge collapsed in the Maluku island region in eastern Indonesia on Thursday.

Southeast Asia - Fri, November 1, 2024 | 12:04 pm GMT+7

Thailand to raise retirement age to 65

Thailand to raise retirement age to 65

Thailand's Labor Ministry plans to raise the retirement age for both private and government sectors to 65 years, the same as in Singapore and Switzerland, according to Labour Minister Phiphat Ratchakitprakarn.

Southeast Asia - Fri, November 1, 2024 | 12:03 pm GMT+7

A quarter of Singapore’s fish farms stop operations in past year

A quarter of Singapore’s fish farms stop operations in past year

About a quarter of Singapore’s sea-based fish farms have exited the industry over the past year, figures from Singapore Food Agency (SFA) showed.

Southeast Asia - Fri, November 1, 2024 | 12:02 pm GMT+7

Malaysia plans to launch national AI office

Malaysia plans to launch national AI office

The Malaysian Government plans to launch the National Artificial Intelligence Office (NAIO) in Kuala Lumpur on December 12, according to the country’s Digital Minister Gobind Singh Deo.

Southeast Asia - Fri, November 1, 2024 | 12:00 pm GMT+7

Vingroup posts Q3 earnings of $80 mln, highest in five years

Vingroup posts Q3 earnings of $80 mln, highest in five years

Vingroup, the largest private multi-industry conglomerate in Vietnam by ecosystem, recorded a consolidated net profit of VND2,015 billion ($79.54 million) in Q3/2024, the heftiest quarterly earnings in the past five years.

Companies - Fri, November 1, 2024 | 11:54 am GMT+7

Thailand SCG to invest $700 mln more in $5 bln petrochemicals complex in Vietnam

Thailand SCG to invest $700 mln more in $5 bln petrochemicals complex in Vietnam

Thailand’s Siam Cement Group (SCG) will invest an extra $700 million in the $5.2 billion Long Son Petrochemicals Complex (LSP) in Vietnam’s southern province of Ba Ria-Vung Tau to diversify its production.

Industries - Fri, November 1, 2024 | 10:20 am GMT+7