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Gold deposit interest rates more and more attractive
Previously, people only made deposits in VND or dollars, while they bought gold just to keep under their pillows as a kind of asset. However, the situation is quite different now: people are rushing to make deposits in gold, while banks are trying to attract gold deposits.
Statistics show that since 1988, SJC alone has marketed 11mil taels of gold, which means that a huge volume of gold is being kept by people. Commercial banks are trying to attract more gold by continuously increasing deposit interest rates. Some of the banks are preparing for the establishment of gold trading floors in the near future.
The volume of gold mobilised by banks has increased sharply in recent times compared to previous years. According to the Vietnam Gold Business Association, the value of deposits in gold has increased from VND5tril to VND18-24,000bil, or VND1-1.5mil taels.
The interest rates for gold deposits have been pushed up to 6.5% per annum at the highest level. Viet A is leading banks in offering the highest interest rates for gold deposits, at 6.5% per annum on 12-month term deposits.
In fact, not all banks dare mobilise capital in gold, because it is difficult to turn gold into cash, while the gold price fluctuations may cause risks for banks. Therefore, the gold lending market is now being exploited by some 10 banks only.
Do Hoang Linh, Head of the Research and Market Development Division under Viet A Bank, said that not every bank is capable of mobilising gold from the public. Banks need to consider how to use capital in gold most effectively before they decide to go after the precious metal.
Linh said that every day, Viet An mobilises capital worth VND20-30bil in gold. The high interest rates for short-term deposits prove to be very attractive to depositors.
More and more depositors want to make deposits in gold because they can still keep gold in hand, which protects them from high inflation, while they can make profit on the gold.
If gold prices increase, people make double profit on gold deposits (they can earn money from both the price increases and the interest rates on the deposits).
How high will gold deposit interest rates go? Linh from Viet A said that this depends on VND and US$ deposit interest rates. The interest rates of 15% for VND deposits and 6.5% for gold deposits prove to be the most suitable levels.
VNN
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