Deposit interest rates continue to decrease immediately after the State Bank's decision

Customers transact at Vietcombank Vinh Phuc branch. Illustrative photo

Specifically, the deposit interest rate table posted at Vietnam International Commercial Joint Stock Bank (VIB) recorded a decrease of 0.2-0.25%/year for many terms. This is the second time in June that VIB has reduced deposit interest rates.

The highest interest rate has been reduced from 7.7%/year to 7.5%/year, applicable to customers depositing for a term of 15 months or more. For short terms of less than 6 months, the interest rate mobilized by VIB has been reduced from 5%/year to 4.75%/year, the maximum rate according to the new decision of the State Bank, which will take effect from June 19.

Also adjusting the interest rate table, An Binh Commercial Joint Stock Bank (ABBank) reduced the interest rate for 1-month term to 4.5%/year, and for 2-5 month term to 4.75%/year. Compared to the previously listed interest rate table, these mobilization rates have decreased by 0.25-0.5%/year.

Not only short-term, ABBank also sharply reduced interest rates for terms of 15 months or more from 8.3%/year to 7.9%/year. The highest interest rate at ABBank remains at 8.5%/year for online deposits of 18 months or more.

Similarly, at the Joint Stock Commercial Bank for Industry and Trade (PvcomBank), although the interest rate for deposits with terms of less than 6 months updated in early June 2023 was at 4.5%/year, below the ceiling according to the new decision of the State Bank, PvcomBank continued to reduce the interest rate for these terms to 4.25%/year.

At Saigon Bank for Industry and Trade (Saigonbank), although interest rates for terms under 6 months have not been adjusted, interest rates for some other terms have decreased by 0.2%/year. Interest rates for terms from 6 to under 12 months have decreased to 7-7.1%/year; for terms of 12 months, it is 7.4%/year.

Previously, on the afternoon of June 16, the State Bank of Vietnam issued decisions to adjust interest rates. In which, the maximum interest rate applied to non-term deposits and deposits with terms of less than 1 month remains at 0.5%/year; the maximum interest rate applied to deposits with terms from 1 month to less than 6 months is reduced from 5.0%/year to 4.75%/year; the interest rate for deposits with terms of 6 months or more is determined by credit institutions based on the supply and demand of capital in the market. The decision takes effect from June 19.

The State Bank said that continuing to adjust the operating interest rates down is a flexible solution, suitable to current market conditions, to achieve the goal of reducing lending interest rates to support the economic growth recovery process according to the policy of the National Assembly and the direction of the Government and the Prime Minister. Thereby, the State Bank continues to orientate to reduce the market lending interest rate level, contributing to removing difficulties for businesses, people and the economy.

At the same time, the adjustment to reduce the ceiling interest rate on VND deposits for terms from 1 to less than 6 months also helps credit institutions reduce input costs, thereby creating favorable conditions to continue reducing lending interest rates to support customers in reducing financial costs.

However, the State Bank affirmed that it will not be subjective with inflationary pressure; in the context of global inflation forecast to continue to remain high; major central banks continue to tighten monetary policy, anchoring interest rates at high levels. The State Bank continues to closely monitor domestic and international developments, forecast inflation and market interest rates to continue directing credit institutions to have cost-saving solutions to reduce lending interest rates to support businesses to recover and develop production and business.

Updated to early June 2023, more than half of commercial banks are mobilizing interest rates of 5%/year for terms under 6 months. Thus, many more banks will need to adjust their interest rate tables to ensure the new regulation of interest rates for terms under 6 months at a maximum of 4.75%/year.

Although the State Bank only regulates the ceiling interest rate for deposits with terms of less than 6 months, experts predict that interest rates for long terms will also decrease in the near future.

According to VNA