High rates draw crowds to Vietnam banks after Lunar New Year holiday

Despite advance preparations, many bank branches were overwhelmed on Monday, the first working day after the nine-day Lunar New Year (Tet) holiday.

Beyond customers rolling over or topping up maturing deposits, banks also saw a steady stream of new placements, as proceeds from pre-Tet sales and unspent bonuses and lucky money were brought in for deposit. A smaller group, mostly elderly clients, visited branches to settle utility bills.

Heavy foot traffic on the first working day of the year is a familiar post-Tet pattern, given the extended holiday break. This year, however, higher deposit rates have drawn a sizable pool of idle cash back into the banking system.

Ahead of the holiday, private creditor SeABank notified customers of a new deposit rate schedule effective from February 10, 2026. Under the revised terms, rates range from 4.75% per year for one- to five-month tenors, 7.7% for six months, 8% for 12 months, and 8.1% for maturities of 13 to 36 months.

The rate table has been maintained after Tet, excluding additional early-year promotional incentives.

At Saigon-Hanoi Commercial Joint Stock Bank's (SHB) Xa Dan branch in Hanoi, the posted rate table remained unchanged, though staff quoted 7.6% per year for six-month deposits.

At VPBank, a leading private lender in Vietnam, negotiated rates for the same tenor could go as high as 7.8% per year.

Beyond publicly posted rates, some banks offered additional interest of up to 0.2 percentage point per year to priority and VIP clients through negotiated rates subject to internal approval.

Explaining the uptick in deposit rates, analysts at Vietcombank Securities (VCBS) said short-term cash withdrawals, salary and bonus payments, and settlement of goods and services typically surge ahead of the Lunar New Year.

That dynamic prompts banks to lift rates on short- and medium-term tenors to shore up liquidity, adding upward pressure in the first half of Q1, particularly from January through early February.

VCBS forecasts deposit rates will edge up by a further 0.3 to 0.5 percentage point in H1/2026, citing banks’ need to build funding buffers to meet credit demand from production and business activities.

The brokerage also noted that the gap between total deposits and outstanding loans across the system remains elevated, particularly after robust credit growth throughout 2025.

In H2/2026, deposit rates could rise by another 0.4 to 0.5 percentage point, with divergence among lenders becoming more pronounced, according to VCBS. State-owned banks had already raised rates by 0.3 to 0.6 percentage point in December 2025 to shore up liquidity for year-end credit demand and ahead of the expiry of the State Bank of Vietnam’s Circular 26/2022/TT-NHNN providing conditions on non-government guaranteed offshore loans this year.

Similarly, MB Securities (MBS) expects deposit rates to rise by about 0.5 percentage point in 2026, as funding demand in the economy remains elevated while maturity mismatches and asset-quality pressures across the banking system show little sign of easing.

The intensifying competition for deposits suggests lenders are building up sizeable funding reserves to support credit growth - a constructive signal for 2026, even as lending rates are projected to climb in tandem.