The Rising Trend of Savings Account Interest Rates

Most recently (November 20), Nam A Commercial Joint Stock Bank (Nam A Bank) adjusted the counter deposit interest rate for a 24-month term, with an end-of-term interest rate of 5.8%/year to 6.0%/year, applicable to deposits from VND 500 billion and above. The interest rates for the remaining terms remain unchanged.

For online savings deposits, Nam A Bank has made significant adjustments to deposit interest rates for some terms, with the highest increase of up to 0.7 percentage points. After the adjustment, the online savings deposit interest rate at this bank is as follows: 1-2 month term is 4.5%/year; 3-month term is 4.75%/year; 10-month term is 5.3%/year; and 36-month term is 5.9%/year.

Previously, ABBank Joint Stock Commercial Bank also adjusted deposit interest rates for savings with terms of 3-5 months, specifically: the 3-month term increased by 0.2 percentage points to 4.1%/year; and the 5-month term increased by 0.7 percentage points to 4.3%/year. The interest rates for the remaining terms remain the same.

Viet A Commercial Joint Stock Bank (Viet A Bank) also adjusted to increase deposit interest rates for all terms, specifically: the 1-month term increased by 0.3% to 3.7%/year; the 2-month term increased by 0.4% to 3.9%/year; the 3-month term increased by 0.3% to 4.0%/year; the 6-8 month term increased by 0.4% to 5.2%/year; the 9-11 month term increased by 0.6% to 5.4%/year; the 12-13 month term increased by 0.3% to 5.7%/year…; and the 36-month term increased by 0.2% to 6.0%/year.

Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) adjusted to increase deposit interest rates for some terms, such as: the 6-month term increased by 0.2% to 5.3%/year; and the 12-13 month term increased by 0.1% to 5.6% and 5.8%/year, respectively.

International Joint Stock Commercial Bank (VIB) also adjusted to increase deposit interest rates by 0.1% for savings deposits with terms of less than 6 months. After the adjustment, the online deposit interest rates for a 1-month term increased to 3.6%/year; the 2-month term increased to 3.7%/year; and the 3-5 month term increased to 3.9%/year.

Not only joint-stock commercial banks have adjusted deposit interest rates, but this adjustment also witnessed the participation of a state-owned bank, specifically: The Bank for Agriculture and Rural Development of Vietnam has adjusted to increase deposit interest rates for all terms, with an average increase of 0.2-0.3 percentage points. After the adjustment, the counter deposit interest rates for a 1-month term is 2.2%/year; the 3-month term is 2.5%/year; the 6-month term is 3.5%/year; the 12-month term is 4.7%/year; and the 24-month term is 4.8%/year.

According to market statistics, from the beginning of November 2024 to now, more than 10 banks have adjusted to increase deposit interest rates for some terms, including: Agribank, Techcombank, BAO VIET BANK, HDBank, GPBank, LPBank, Nam A Bank, IVB, Viet A Bank, VIB, MB, ABBank, VietBank…, with an adjustment increase of 0.1 – 0.7 percentage points.

Commenting on this interest rate hike, financial and banking expert Nguyen Tri Hieu said that this interest rate hike by banks is understandable, as capital mobilization usually increases sharply at the end of the year when businesses ramp up production and business activities. This requires banks to offer attractive interest rates to attract capital. Therefore, deposit interest rates will remain high compared to the beginning of the year, and it will be difficult to lower interest rates in the near future.

Analysts from MBS predicted that this interest rate hike trend is expected to continue until the end of this year in the context of credit growth increasing nearly twice as fast as the growth rate of capital mobilization. Data from the State Bank of Vietnam shows that credit growth as of October 31 has increased by 10.08% compared to the end of 2023. This is a factor contributing to the continued adjustment of deposit interest rates by banks to attract new capital, thereby ensuring liquidity.

“We forecast that the input interest rate will increase slightly by 20 basis points by the end of the year. We believe that the recovery of credit growth in the context of stronger production and investment in the last months of the year will somewhat put pressure on the system’s liquidity and may lead to an increase in input interest rates,” MBS experts predicted, adding: “As of the end of October, credit growth increased by 10.08%, higher than the 7.4% recorded in the same period last year. On the other hand, low inflation and the US Federal Reserve’s interest rate cut are expected to create more room for monetary policy easing in Vietnam. Based on these factors, we forecast that the 12-month deposit interest rate of large banks may increase by another 20 basis points, fluctuating around 5.1% – 5.2% by the end of 2024.”