COVID-19 pushes banks to lower deposit rates

Many banks have cut their deposit interest rates significantly this month due to a credit growth slowdown in the wake of the pandemic.

Illustrative image (Photo: VNA)

Private banks such as VPBank, MBBank, ACB and Viet Capital Bank have reduced their interest rates by 0.2-0.7 percentage points per year.

VP Bank has lowered its interest rate on savings accounts by 0.2-0.7 percentage points for many terms, with six-month deposits standing at 6.6% a year and 6.7-7.2% a year for 12-month deposits.

For the bank’s online deposits, the interest rate has also dropped by 0.35% to 6.9-7.2% per year for 18-36-month term deposits.

MBBank has also announced a new deposit interest rate list this month, down 0.1-0.5 percentage points from the previous rate.

For six-month term deposits, the interest rate at the counter has decreased by 0.4 percentage points to 6% per year while the rate for 13-month deposits has been lowered by 0.1 percentage points to 6.6%.

ACB has lowered its interest rate on savings accounts for almost all terms by 0.25-0.55 percentage points per year, with 12-month deposits staying at only 6.7-7% per year, depending on the total of deposits.

State-owned banks have also dropped their deposit interest rates.

Vietcombank has lowered its deposit interest rates by 0.2-0.3 percentage points for periods of six months or more. An individual account will now get a 6.6% interest rate per year for a 12-month deposit instead of 6.8%.

Vietinbank has cut its interest rates by 0.2 percentage points to 6.6% for terms of six to less than 12 months, keeping the rate for a 12-month fixed deposit unchanged at 6.8%.

BIDV has cut its rates by 0.05-0.2 percentage points for most periods, except for 12-month deposits which is still 6.8%.

 Previously, banks cut short-term deposit rates after the central bank in March reduced the cap on interest rates on VND deposits of one to six months from 5% to 4.75%.

 The cut came as the country’s bank credit growth in the first quarter of this year was only 1.1%, slowing significantly against the 2.28% rate in the same period last year, with many firms scaling down their business due to the adverse impacts of the COVID-19 pandemic.

 Experts said decreasing credit demand meant banks had high liquidity and therefore don’t need to mobilise more cash.

 However, they said, if the pandemic worsens, more companies would need credit to save their businesses and at that time deposit interest rates could rise.

VNS/VNA

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