Vietnam bank deposit rates hit 9%: Is the race to mobilize capital heating up again?

Vietnamese banks have largely kept publicly listed deposit rates unchanged, but many are quietly offering significantly higher returns to priority customers and large depositors as competition for funding intensifies amid robust credit growth.

This happens though the State Bank of Vietnam (SBV) continuously calls for a reduction in interest rate levels to support economic growth.

A survey conducted in early July showed that most lenders continued to quote annual interest rates of between 5% and 6.5% for deposits with maturities of six to 12 months. Some smaller banks maintained rates above 7% for online deposits or longer-term tenors.

Behind the posted rates, however, corporate clients, affluent customers and large depositors said they had been offered effective yields of 8.5% to 9% a year through interest rate bonuses, certificates of deposit and tailor-made deposit products.

PVcomBank is among the lenders offering some of the highest returns, with effective rates of 8.8% to 9% for six-month deposits and 9% to 9.2% for 12-month deposits, subject to minimum deposits of around VND100 million dong ($3,810). Previously, such preferential rates were typically reserved for customers depositing several billion dong (VND1 billion = VND38,050), but eligibility has broadened considerably.

The trend reflects growing funding needs across Vietnam's banking sector as lending continues to outpace deposit mobilization.

According to the SBV, outstanding credit reached more than VND19,970 trillion ($759.88 billion) as of June 26, up 7.41% from the end of 2025 and 18.1% from a year earlier. Deposits, by comparison, increased by only about 5.02%.

The widening gap between credit expansion and deposit growth has repeatedly been flagged by policymakers. At a press briefing on July 2, Pham Chi Quang, head of the SBV's monetary policy department, said credit growth exceeded deposit growth by an average of 3.8 percentage points annually between 2021 and 2025, pushing the banking system's loan-to-deposit ratio (LDR) to around 111% to 112%.

Quang said the ratio implied that roughly one out of every VND11 to VND12 lent by banks was funded through sources other than household and corporate deposits.

The funding pressure helps explain why lenders continue to enhance deposit offerings even as authorities seek to maintain stable interest rates.

Can Van Luc, a member of the National Financial and Monetary Policy Advisory Council, said Vietnam's ambitious economic growth target for 2026 of at least 10% would require substantial financing from the banking sector. With bank credit remaining the primary source of funding for businesses, stronger competition for deposits was unavoidable, he said.

Banking expert Nguyen Tri Hieu said competition for deposits would likely be concentrated among small and medium-sized banks, which generally face greater liquidity pressures. He said recent rate adjustments were aimed mainly at balancing funding sources rather than signalling any shift in the central bank's monetary policy stance.

External factors are also adding pressure. Elevated U.S. interest rates and periodic strength in the U.S. dollar have kept exchange rate risks in focus, making it important for Vietnam to maintain sufficiently attractive dong deposit rates to support capital flows and banking system liquidity.

Positive real returns improve appeal of bank deposits

Bank deposits are gradually regaining appeal after several years of relatively low returns.

According to the National Statistics Office, consumer prices rose an average of 4.38% in the first half of the year, while core inflation increased 4.12%. At effective deposit rates of 8.8% to 9%, savers can still earn real returns of more than 4% after adjusting for inflation, an attractive yield for an asset considered to carry relatively low risk.

The improvement in deposit returns is unlikely to trigger a broad shift away from equities or real estate, but it could alter the relative attractiveness of investment options.

With savings accounts offering close to 9% annual returns at relatively low risk, investors are likely to demand higher expected returns from stocks and other riskier assets. That could encourage more selective capital allocation, favoring companies with strong balance sheets, stable cash flows, and sustainable earnings growth.

For businesses, however, persistently higher deposit rates could eventually raise borrowing costs, weighing on sectors that rely heavily on leverage, including real estate, construction, building materials and infrastructure.

Even so, economists said a repeat of the aggressive deposit rate competition seen in 2022 remained unlikely. System-wide liquidity remains broadly adequate, while the SBV retains a range of policy tools and continues to prioritize keeping lending rates at levels that support economic growth.

Banks are also unlikely to push deposit rates excessively higher because doing so would directly compress net interest margins (NIM), hurting profitability.

Instead of an open rate war through publicly posted rates, analysts expect competition in the second half of the year to take place largely through targeted interest rate bonuses, certificates of deposit and customized products aimed at specific customer segments.

For savers, the trend presents an opportunity to improve returns by comparing products across lenders. From a macroeconomic perspective, however, movements in deposit rates will remain a key factor shaping capital flows between banks, equities and real estate, as well as influencing the pace of Vietnam's economic recovery in the second half of the year.