Major Banks Hike Interest Rates on Savings: VPBank Leads the Pack with a Significant Increase from August 8th

Viet Nam Thriving Commercial Joint Stock Bank (VPBank) has introduced a new deposit interest rate schedule, effective today (August 8). Accordingly, VPBank has increased interest rates by 0.5% per annum for 1-month term deposits and 0.2% per annum for other terms.

Specifically, VPBank has implemented interest rates corresponding to 5 tiers of deposit amounts: Below VND 1 billion; From VND 1 billion to below VND 3 billion; From VND 3 billion to below VND 10 billion; From VND 10 billion to below VND 50 billion; and VND 50 billion and above.

For over-the-counter deposits, the interest rate for 1-month term deposits ranges from 3.5% to 3.7% per annum, depending on the deposit amount. The interest rate for 2- to 5-month terms is 3.75% to 3.9% per annum, while the rate for 6- to 11-month terms is currently 4.9% to 5.1% per annum. The interest rate for 12- to 18-month terms is currently at 5.4% to 5.5% per annum, and the rate for 24- to 36-month terms is 5.7% to 5.8% per annum.

If customers choose to deposit online, the interest rate is higher by 0.1% per annum compared to over-the-counter deposits. Specifically, the interest rate for 1-month term deposits ranges from 3.6% to 3.9% per annum, while the rate for 2- to 5-month terms is 3.8% to 4.0% per annum. The interest rate for 6- to 11-month terms is 5.0% to 5.2% per annum, 12- to 18-month terms is 5.5% to 5.6% per annum, and 24- to 36-month terms is 5.8% to 5.9% per annum.

Additionally, VPBank offers a priority customer policy, where customers with a minimum deposit balance of VND 100 million and a minimum term of 1 month will receive an additional 0.1% per annum on top of the current advertised rates.

As a result, the highest deposit interest rate at VPBank can reach 6.0% for priority customers who deposit online with amounts of VND 10 billion and above for 24- to 36-month terms. For smaller deposit amounts, the maximum savings interest rate applied at VPBank is 5.9% per annum.

This is the sixth time VPBank has increased deposit interest rates in the past 5 months. The last time the bank adjusted its rates was on July 16, with an increase of 0.1% per annum for terms ranging from 2 to 18 months.

With this adjustment, VPBank becomes the tenth bank to raise interest rates since the beginning of August. Previously, several banks had increased deposit interest rates at the beginning of the month, including Agribank, Eximbank, HDBank, Sacombank, Saigonbank, TPBank, CB, VIB, and Dong A Bank.

Deposit interest rates have been on an upward trend since the end of the first quarter, with widespread increases in the second quarter and the beginning of the third quarter.

According to analysts, the low growth in deposits from individuals and businesses in the first months of the year, coupled with the recovery in credit growth, has prompted many banks to raise deposit interest rates to ensure a balance in capital sources, especially during the peak period at the end of the year. Additionally, the interventions of the State Bank of Vietnam (SBV) through open market operations and foreign currency sales have impacted the Vietnamese Dong liquidity of banks.

With the recent increases in deposit interest rates by banks with the largest deposit bases in the system, such as Agribank, VietinBank, BIDV, VPBank, and Sacombank, the deposit interest rate landscape is expected to continue climbing in the coming period.

In a recently published macroeconomic report, analysts from Rong Viet Securities (VDSC) stated that open market operations and foreign currency sales in the first half of the year have maintained interbank interest rates at a high level. However, these activities may cause difficulties in Vietnamese Dong liquidity in the coming period, especially as M2 money supply increases slowly while credit growth accelerates.

VDSC expects deposit interest rates to continue rising slightly and end 2024 about 0.5 to 1 percentage points higher than the beginning of the year.

In a new analysis, Military Bank Securities (MBS) stated that, in the context of credit growth tripling the growth rate of capital mobilization, banks are aggressively increasing deposit interest rates to enhance the competitiveness of savings channels compared to other investment channels in the market.

The analysis team forecasts that interest rates on deposits will continue to increase in the second half of 2024 due to the expected rise in credit demand from mid-2024 as production and investment accelerate in the last months of the year.

“We forecast that the 12-month term deposit interest rate of large commercial banks will likely increase by 0.5 percentage points, returning to the range of 5.2-5.5%/year by the end of 2024,” MBS wrote in its report.