Add a Reverse Mortgage, Cut Savings Rates from Today Aug 14

15 August, 2024

Bac A Bank, a Vietnam-based joint-stock commercial bank, has announced a new interest rate for deposits, effective today (August 14th). The bank has reduced rates across all tenures.

According to the latest interest rate schedule for deposits below VND 1 billion with interest payable at maturity, the rate for 1-2 month tenures has decreased by 0.2% compared to the previous rate, now standing at 3.5% per annum. The interest rates for 3-4 month tenures have also witnessed a reduction of 0.1%, settling at 3.8% and 3.9% per annum, respectively, while the 5-month tenure has seen a 0.2% decrease to 4% per annum.

The interest rate for 6-7 month deposits has been lowered by 0.15% to 5% per annum, and the 8-month tenure has experienced a 0.05% dip to 5.1% per annum.

Following a 0.15% reduction, the interest rate applicable to 9-11 month tenures also stands at 5.1% per annum.

The savings rate for the 12-month tenure has decreased by 0.15% to 5.6% per annum, while the 13-15 month tenure has seen a 0.1% reduction, now at 5.65% per annum.

Bac A Bank’s highest interest rate for deposits below VND 1 billion is currently listed at 5.75% per annum for the 18-36 month tenure, after a 0.1% decrease compared to the previous rate.

In tandem with the reduction in interest rates for deposits below VND 1 billion, Bac A Bank has made similar adjustments for deposits of VND 1 billion and above, maintaining a 0.2% higher rate compared to deposits below VND 1 billion.

Currently, the highest interest rate at Bac A Bank stands at 5.95% per annum for 18-36 month tenures with deposits of VND 1 billion and above, with interest payable at maturity.

Bac A Bank is one of the rare banks moving against the market’s general trend of adjusting deposit interest rates. Recently, SeABank reduced its interest rates across all tenures by 0.25% per annum. Prior to this, the bank had increased its highest interest rate to 6.2% per annum, leading the market.

After hitting a low in March, deposit interest rates began to climb back up in the latter part of the first quarter and continued to rise in the second and third quarters. From the beginning of August until now, the market has witnessed 12 banks raising their deposit interest rates, including major players such as Agribank, Eximbank, HDBank, Sacombank, Saigonbank, TPBank, CB, VIB, Dong A Bank, VPBank, Techcombank, and VietBank. In contrast, only two banks have lowered their savings rates since the start of this month.

Analysts attribute the recent increases in deposit interest rates to several factors. Firstly, the slow growth in deposits from individuals and businesses in the early months of the year, coupled with a rebound in credit growth, has prompted many banks to offer higher rates to attract more deposits and maintain a balanced capital source, especially during the peak season towards the end of the year. Additionally, the State Bank of Vietnam’s interventions through open market operations and foreign currency sales have impacted the Vietnamese Dong liquidity of banks.

With the largest deposit-holding banks in the system, such as Agribank, VietinBank, BIDV, VPBank, and Sacombank, recently raising their deposit interest rates, the overall deposit interest rate landscape is expected to continue climbing in the coming months.

In a recent macroeconomic report, analysts from Rong Viet Securities (VDSC) predicted that open market operations and foreign currency sales in the first half of the year would maintain high interbank interest rates. However, these activities could also make Dong liquidity challenging in the coming period, especially as M2 money supply growth slows while credit growth accelerates.

VDSC anticipates a slight increase in deposit interest rates, ending 2024 about 0.5-1 percentage points higher than at the beginning of the year.