Banks race to raise savings interest rates

Update: 22-10-2019 | 11:09:26

At this time, some banks have moved to increase deposit interest rates for many periods to meet the loan needs of businesses at the end of the year.

Customers transacting at Ban Viet Bank. Photo: Thanh Hong

The trend of raising deposit rates

After the deposit rate hike in the third quarter, right from the beginning of October, banks continued to raise interest rates or keep high for long-term deposits to attract capital for the year-end business. . Survey of interest rate tables of some banks shows that, different from before, when saving interest rates increased, banks often raised short-term interest rates to attract idle money among people. This trend is now corrected by banks.

Accordingly, long-term savings interest rate was adjusted up sharply, while short-term deposit interest rates were not adjusted. Specifically, at Ban Viet Bank, the maximum mobilizing interest rate is up to 8.9% / year, up by 0.2% compared to the end of August, 2019, applied for renewed deposits from VND 100 million for the term of 15 months. With the same minimum deposit, the interest rates are 8.5% / year and 8.7% / year for 6 and 12 month terms, respectively. This bank also offers a promotional gift when customers save. However, these interest rates are in the incentive program to celebrate Vietnamese Women's Day (October 20) and only last from November 14 to 15.

Similarly, within the framework of the preferential offer program, Saigon - Hanoi Commercial Joint Stock Bank (SHB) applies interest rates of 8.1% / year, 8.2% / year and 8.3 respectively. % / year for individual customers to join the ladder savings product by amount, 6, 9 and 13 month terms. Meanwhile, North Asia Commercial Joint Stock Bank, Vietnam Technological and Commercial Joint Stock Bank (Techcombank) ... apply the highest interest rate increase for popular savings products with 12-month term or minimum deposit. VND 3 billion of 15-month term at the counter is entitled to an interest rate increase of up to 0.4%, reaching 7.1% / year. Currently, the highest interest rate at these banks is 7.4% / year, applied to customers who prefer to save online via FMB / FIB (digital banking service) with 18-month term. Meanwhile, in the same form of saving, interest rates for 19, 20 and 24 month periods decreased by 0.3% to 6.9% / year.

Not only joint-stock commercial banks raised deposit rates, commercial banks with State-owned capital also increased slightly. Typically, Vietnam Joint Stock Commercial Bank for Investment and Development (BIDV), Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) are applying the highest interest rate in the group of 7% / year for term deposits over 12 months.

Thus, it can be seen that after a period of quiet tendency, even some large banks have reduced short-term deposit interest rates, this time banks are entering the race to attract idle money in the long term period.

Enterprises worry about profit reduction

There are many reasons for deposit rates to go up. According to the leader of a bank in Thu Dau Mot City, the increase in interest rates only occurred locally in some banks, mainly small and medium-sized banks, not the whole banking system. . The adjustment to increase the savings interest rate to attract capital, because at the end of the year, the loan needs of businesses often increase.

Meanwhile, the bank has to promote capital mobilization, especially at the end of 2019, the time limit for the implementation of regulations on the ratio of short-term capital use for medium and long-term loans decreased from 45% to 40% and reduced to 30% by 2021 of the State Bank takes effect. That is, banks no longer use too much short-term capital to make medium and long-term loans as before, so they have to adjust to attract long-term capital flows.

In fact, the VND deposit interest rates going up are expected to have a two-way effect. First of all, rising interest rates have the opposite effect on the economy, which is slowing down the momentum of the economy by reducing the amount of money flowing into the economy. At the same time, increasing deposit rates will increase lending rates, which means that credit is tightened, reducing credit to the economy, helping the State Bank and Government control inflation. Meanwhile, controlling inflation is one of the key tasks in the past and from now to the end of 2019. Therefore, the increasing interest rate also makes businesses worried.

Mr. Huynh Quang Thanh, General Director of Hiep Long Wood Co., Ltd, expressed his concern about the possibility of loan interest rates going up. He said if bank loans with large amounts of money that interest rates will increase costs of businesses, profits will decrease significantly. Therefore, the company is considering many options to reduce costs.

Representatives of a business in the import of electrical equipment said that although banks have not announced an increase in interest rates, it is clear that the race to raise deposit rates now will surely affect the business. Because in addition to no longer enjoying preferential interest rates, businesses will also bear higher interest rates when deposit rates rise. This is normal when the bank's input increases. However, this will cause more or less difficulties for the business community in the coming days.

Reported by Thanh Hong – Translated by Vi Bao

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Banks race to raise savings interest rates

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