The Great Capital “Hideaway”: Unveiling the Mystery

The State Bank has just announced figures related to the total means of payment and customer deposits in the credit institution system. Specifically, the amount of money deposited in banks in the first two months of 2025 hit a record high as residents continued to rush to deposit money in the banking system.

Household deposits at credit institutions by the end of February reached VND 7,366 million billion, up 4.26% compared to the end of 2024, setting a new record. Compared to the end of January, household savings increased by VND 178,000 billion, and compared to the end of 2024, it increased by VND 301,000 billion. The increase in household deposits in February was also a record high, marking 13 consecutive months of positive growth.

According to the financial report for the first quarter of 2025 published by banks, BIDV led with a huge amount of over VND 1,970,000 billion in deposits. The next positions were VietinBank (VND 1,620,000 billion), Vietcombank (VND 1,500,000 billion), and MB (over VND 722,000 billion).

Private banks also performed well, with Sacombank taking the lead with more than VND 585,000 billion in deposits. VPBank ranked second with over VND 552,000 billion. In the first three months, VPBank recorded the strongest growth, attracting an additional VND 66,700 billion, equivalent to 13.7%.

Notably, resident deposits continued to increase despite the recent decline in bank interest rates. This strong growth reflects the cautious mindset of the people in the context of the uncertainty of other investment channels.

Previously, to attract customers, many commercial banks in February adjusted their deposit interest rates upward, pushing the interest rate level higher than in the previous months. Some banks even offered rates above 6%/year. Specifically, interest rates for 3-month terms ranged from 3.5% to 4.6%/year; 6-month terms ranged from 4.8% to 5.9%/year; and 12-month terms recorded the highest rate at up to 7.7%/year, depending on the bank.

However, from the end of February, following the Government’s and the State Bank’s direction to create room for lending rate reduction, banks started to lower deposit interest rates. Since March, 29 banks have reduced deposit interest rates by 0.3 to 1.3 percentage points per year, depending on the term.

While resident deposits increased significantly, deposits from economic organizations continued to decline for the second consecutive month. In February alone, deposits from this customer group decreased by VND 71,000 billion, bringing the total net withdrawal in the first two months of 2025 to VND 305,000 billion. As of the end of February, total deposits of economic organizations in the banking system stood at VND 7,362 million billion, down 3.98% compared to the end of 2024.

With this decline, the amount of deposits in the banking system from individual customers has officially surpassed that of economic organizations.

With savings interest rates at a low level, finding efficient and safe investment channels is a major concern for many investors. According to experts, the low-interest-rate environment leads many individuals to shift to other investment channels such as securities, real estate, and gold, which is a normal development in the economic cycle.

However, according to a research report on investment channel prospects in 2025 by a team led by Dr. Can Van Luc, Dr. Pham Thi Hanh, MsC. Nguyen Quang Hung, and MsC. Ha Thanh Luong, savings will remain a safe investment channel in the future. Real estate and securities may continue to be attractive investment channels, but they correspond to higher risks and require longer investment horizons.

Nevertheless, in the context of stagnant or only slightly increasing deposit interest rates, investors, depending on their risk appetite, may consider reducing the proportion of savings and shifting to channels with higher yields.