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Both banks and depositors prefer short-term deposits
Short-term deposits (less than three months) have been the overwhelming favourites at banks recently. Banks are offering higher interest rates for short-term deposits, while depositors also prefer making short-term deposits because they can quickly get back capital for other investment deals.
Eximbank Vietnam is now offering 17.7% per annum in interest on 1-3-month term deposits, while the rates for 6-month term and 9-month term deposits are 17.604% and 17.22%, respectively.
Meanwhile, Asia Commercial Bank (ACB)’s rate is VND17.35% per annum for 1-month term deposits, 17.4% for two-month, 17.5% for three-month,17.4% for 6-month, and 17.1% for 12-month term deposits.
Bui Tan Tai, Deputy General Director of ACB, said that mobilised capital has been stable recently with more short-term deposits than long-term.
In fact, some banks are offering relatively high interest rates on over 6-month term deposits, but depositors still prefer short-term deposits as they allow them to more easily control their money.
The CPI increase has been slowing down, which has put banks under pressure to slash lending interest rates in order help ease difficulties for borrowers. Therefore, banks are trying to push up mobilising short-term capital in order to ease the pressure on capital mobilisation costs in case the interest rate ground decreases.
If banks now mobilise long-term capital at 17-18% per annum, they will suffer later if the rates go down.
In fact, banks have not pushed up long-term loaning; therefore, they do not intend to push up mobilising long-term deposits. Experts say that when inflation returns to the one-digit level, banks will return to boosting long-term capital mobilisation.
Tran Phuong Binh, General Director of East Asia Bank (EAB), said that it would be more profitable for depositors to make over 6-month term deposits, because the interest rates tend to decrease when the national economy is better off.
VNN
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