Domestic banks reduce one-year deposit interest rates to below 9%

Vietnam's domestic banks have all reduced their deposit interest rates for one-year terms to below 9%, with state-controlled commercial banks Agribank, VietinBank, BIDV, and Vietcombank, also known as the “Big 4”, setting the lowest rates of 7.2%.

The State Bank of Vietnam (SBV) in mid-March cut several policy interest rates for the first time in two years. It further lowered its policy interest rates by 0.5 percentage points on April 3 in a move to support growth amid global economic headwinds.

As a result, many domestic banks have followed suit and ABBank was the latest to follow suit by reducing its deposit interest rate to 8.8% on Wednesday.

8.8%, also the highest deposit rates at the moment for 12-month terms, is also available at OCB, HDBank, and KienlongBank. Nam A Bank and VietABank offer the second-highest rate at 8.7%.

In addition to the Big 4, other major banks have set their rates below 8%, such as ACB at 7.95%; SHB and Eximbank at 7.9%; Sacombank at 7.6%; and Techcombank, MBBank and PGBank at 7.5%.

Deposit interest rates still exceed 9% for deposits beyond 12 months at some banks. In particular, ABBank provides 9% interest rate for terms of 13 months and 9.2% for 24-month terms. OCB offers 9.3% for terms of 13 months and 24 months, while HDBank has set its 13-month rate at 9.2%.

In late December 2022, Vietnamese commercial banks reduced their deposit interest rates below 9.5% following the central bank’s lead.

According to the SBV’s survey for the second quarter of this year, credit institutions expect the deposit and loan interest rates to fall 0.08-0.1 percentage points and 0.19-0.34 percentage points for the whole of 2023.

The survey found that liquidity in the banking system in Q1/2023 remained "good" and marked a significant improvement compared to Q4/2022. It is expected to remain stable in Q2 and continue to improve until the year-end.