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Deposit interest rates becoming hotter
As all commercial banks have been trying to attract more capital to implement their business plans, they have raised deposit interest rates, thus making the monetary market hotter.
Saigon Commercial Bank (SCB) has raised VND deposit interest rates by 0.05%-0.25%, while the deposit interest rates offered by Southern Bank have also increased by 0.3-0.7% per annum.
SaiGonBank is implementing a promotion programme with offered interest rates of up to 9% per annum applied to clients who make 18-month term deposits. The programme is expected to last until June 4.
The Saigon-Hanoi bank has launched the programme “Super attractive savings programme 3+’, offering high interest rates of up to 9.3% per annum (for 36-month term deposits) and the bonus additional interest rate of 0.25%.
Big commercial banks, including Vietcombank and Bank of Investment and Development of Vietnam (BIDV), have also joined the interest rate race, thus pushing deposit interest rates up.
Vietinbank, for example, has launched 2-month term deposit certificates with the offered interest rate of 9% per annum.
The noteworthy thing in the interest rate increase wave is that banks offer high interest rates for longer-term deposits (more than 12 months), at 9-9.5% per annum, while 3-6 month term deposits have interest rates hovering around 8-8.5% per annum.
In an effort to have stable capital, some banks forbid depositors from withdrawing money before maturation, while depositors can only mortgage savings books to borrow 90% of the deposited money at maximum.
Dinh The Hien, Finance and Investment Expert, Member of the Investment Council of Eximbank:
Banks have been pushing up deposit interest rates. What do you think are the reasons?
The credit market has become warm again. With the interest rate subsidy programme, businesses are braver about borrowing money. And of course, when banks see the credit demand increasing, they have to increase deposits.
Banks raise deposit interest rates in order to attract more money. Besides, as predictions say that as the national economy recovers, like a person who has just recovered from illness, it will want to be fed, which means that the GDP will increase which will lead to interest rate increases.
Do you think that the government will increase the basic interest rate by the end of the year?
It depends on the government. However, if the basic interest rate is kept unchanged, this will put difficulties on the banks which have difficulties in mobilising capital. However, it is more likely that the basic interest rate will increase slightly. Commercial banks think this way, which has prompted them to raise deposit interest rate in the last time.
What more do you think the government needs to do to support enterprises, besides the interest rate subsidy programme?
We should keep the market based mechanism and minimise the use of the state’s financial strength to give direct support to businesses, while the government’s strength is limited. The continuous support will make businesses rely on the support, and every industry would demand the support instead of trying to overcome difficulties themselves.
The interest rate subsidy is just a temporary support which aims to help businesses in the most difficult period, while it should not be applied for a long time.
VietNamNet, VnMedia
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