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Interest rates on dollar deposits hit record highs
The Saigon Commercial Bank has set a new record for dollar deposit interest rates, offering 6.3 per cent on three-month deposits since last week.
The surge in dollar deposit interest rates, also taking place at other banks, indicates a rush among banks to cut themselves a larger slice of the large remittance pie during the Tet (Lunar New Year) festival season when overseas Vietnamese typically send more money home.
Kien Long and Asia Commercial Bank have increased their rates on dollar deposits to 6 per cent and 5-5.1 per cent respectively.
The banks said that despite the continuous increase in deposit interest rates in recent times, supply had not still kept pace with demand.
Therefore, some banks have begun offering even more incentives. For instance, if remittance recipients get at least US$5,000 and deposit it with the SCB bank for one month and upwards, they will be offered a gift worth VND50,000 ($2.5).
If overseas remittance is received in US dollars and the recipients resell the currency to SCB, they will receive gifts worth VND160,000 for every $500 worth of deposits.
At the Vietbank, businesses maintaining dollar deposit accounts for at least one week can enjoy domestic and international money transfers for free.
Experts said the demand for salary payment and bonuses were so high in the run up to the Lunar New Year that banks were also raising interest rates on US dollar to increase mobilisation of funds.
However, at a recent meeting, the Viet Nam Bank Association asked its members to consider the issue carefully before increasing deposit rates for the greenback because people would be motivated to hold on to the foreign currency.
Nguyen Duy Hung, General Director of Vietbank, said his bank's US dollar mobilisation interest rate of 6.2 per cent was calculated on the customers' demand for loans from the bank. The high interest rate had been applied for a limited period, and was not a long-term plan.
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