Rising Deposit Rates: Clear Divide of Two Lender Groups

8:51:08 AM | 29/7/2019

In early 2019, some banks lowered their interest rates of dong deposits but many have now revised up their rates for various terms. There is a strong division among banks, particularly commercial banks.

In early July 2019, the highest deposit rate is 8.6% per annum, applied by TPBank, VIB and VietCapitalBank. Many other banks are also applying deposit rates of above 8% per annum.

Reportedly, July is the low time of deposit mobilization as banks tend to launch no major preferential interest rate programs or gifts for depositors. The current signal of rate hikes at many banks heralded that the rate race is showing signs of return after a short time of cooling down.

According to statistics, the highest deposit rate is now 8.6% per annum at VietCapitalBank. In TPBank and VIB, to enjoy this rate, their respective deposit value must be VND100 billion and VND500 billion or more.

Among 30 major banks, 12 are offering the highest interest rate of 8% or more per annum, including ABBank, Eximbank, VPBank, VietBank, VietA Bank, LienVietPostBank, NCB, ACB, PVcomBank and SHB.

In addition to long-term deposit rates (over 13 months) exceeding 8% per annum, banks require high deposit value. However, some banks do not demand high deposit value limits for high rates. For example, Sacombank and Eximbank - two major private banks - apply an 8% interest rate for 13-month deposits regardless of value. Even, this is the highest rates at these two lenders for the time being. VietCapitalBank and CBBank are offering 8.2% interest rates for 13-month deposits without value requirements.

Other lenders like BaoVietBank, VietBank and NCB are also quoting deposit rates of 8% for this maturity term without minimum value requirement.

Especially, Saigon - Hanoi Bank (SHB) also raised the interest rate of 9-month deposits to 8.2% per annum. Accordingly, during the “Golden term to thank customers” program, customers who open new progressive savings books of 9-month maturity term will enjoy attractive interest rates of up to 8.2% per annum. SHB is among lenders with the highest deposit interest rate for 9-month maturity term.

Big State-owned banks like Agribank, Vietcombank, VietinBank and BIDV have interest rates 1-1.5% lower than those quoted by other lenders for the same maturity term.

In particular, 13-month deposit interest rates at Vietinbank, Vietcombank, Agribank and BIDV are only 6.6-6.8% per annum, much lower than smaller banks. Even, their prioritized customers are only entitled to the maximum interest rate of 6.9% per annum for longer terms.

However, the four state-owned lenders still draw most deposits because of their well-established reputation and wide business networks across the country.

For shorter deposit terms (less than 6 months), all banks are capped at 5.5% per annum. Thus, there is no difference in interest rates between big and small lenders. Most quote the upper interest rate limit of 5.5% to court depositors.

However, with no restriction on interest rates of 6-month deposits, competition among banks is much stronger and the difference is now up to 2% in this period. Highest rates are being quoted by VIB at 7.2-7.5% (depending on deposit value), VietCapitalBank and NCB both at 7.4%, VPBank at 7%, MBBank and Sacombank both at 6.5%, ACB at 6.4-6.7% and Techcombank at 6.2-6.4%.

Meanwhile, State-owned lenders like Agribank, BIDV, Vietinbank and Vietcombank are currently quoting the interest rate of 5.5% per annum for their 6-month deposit term. Even, the 9-month deposit rate does not exceed 6%.

The demand for capital mobilization is rising more clearly among banks. This the first time in two years the interest rates of 12-month deposits exceed 8% per annum. Besides, some banks issued certificates of deposit carrying interest rates of up to 9% per annum.

Quynh Chi