Vietnam's highest deposit interest rate hits 7.2% per year in Nov

The average deposit interest rates in VND at Vietnamese commercial banks in November ranged from 5.1% to 6% per year for term deposits of over 12 months to 24 months, and from 6.8% to 7.2% for those with terms longer than 24 months.

According to the State Bank of Vietnam, the rates were 0.1-0.2% per year for demand deposits and those with terms under 1 month; 3-3.8% per year for deposits with terms from 1 month to less than 6 months; and 4.4-5.1% per year for those with terms from 6 months to 12 months.

Previously, the deposit interest rates for terms over 24 months were 6.9-7.4% per year in August and September, and 6.9-7.2% per year in October.

Last month, the deposit interest rate in USD at credit institutions remained at 0% per year for both individual and institutional deposits.

The central bank added that in November, the average lending rates in VND for both new and outstanding loans at local commercial banks ranged from 6.7% to 9% per year.

For short-term loans in priority sectors, the average rate was around 3.8% per year, lower than the maximum short-term lending rate set by the SBV (4% per year).

The average USD lending rate for both new and outstanding loans was between 4.1% and 5% per year for short-term loans, and 6% to 7% per year for medium- and long-term loans.

Latest figures from the SBV showed that the public's bank deposits increased by nearly VND33 trillion ($1.3 billion) in September. From the beginning of the year to the end of September, the total amount of deposits from individuals grew by nearly VND460 trillion to VND6,957 trillion ($273.4 billion), up 6.5% compared to the end of 2023.

Earlier, Vietnamese broker MBBank Securities (MBS) forecast that the upward trend in deposit interest rates will continue toward the end of the year, driven by the rapid growth of credit - almost doubling the pace of deposit growth. As of November 22, credit growth had reached 11.12%, higher than the 9.15% recorded in the same period last year.

It believed that the recovery in credit growth, coupled with a stronger pace of production and investment in the final months of the year, could put pressure on the liquidity of the banking system, potentially leading to higher deposit rates. On the other hand, low inflation and Fed rate cuts could provide some space for monetary policy easing in Vietnam.

“Based on these factors, we forecast that 12-month deposit rates at major commercial banks could inch up 20 basis points (0.2 percentage points) to reach around 5.1-5.2% by the end of 2024,” the broker predicted.