Deposit interest rates begin to see increases

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Accordingly, Lien Viet Post Joint Stock Commercial Bank (LPBank) increases its interest rates for saving accounts by 0.7 – 1.6 percent for the terms of below 12 months deposited over the counter and by 0.2 – 0.9 percent deposited online.

Other commercial banks like OceanBank, HDBank, MSB, Eximbank, BVBank, PVComBank, CBBank, TPBank, GPBank, BacABank have also adjusted their savings interest rates for the past 30 days. After a long time of rate dropping, customers can now enjoy higher deposit interest rates of around 6 percent in private banks. For instance, OceanBank offers the rate of 6.1 percent for the 36-month term.

Experts in the field explained this interest rate growth, saying that following the bottom figure must be a recovery. Meanwhile, considerable increases in gold and stock prices recently have urged many people towards these lucrative investment channels. Therefore, banks need to raise their deposit interest rates to attract the money flow.

Dr. Le Xuan Nghia from the National Advisory Council for Monetary Policies commented that this is logical to draw the public back to the bank via their savings accounts. However, this is rather troublesome when credit is on the way to recovery.

In other words, many businesses are worried that such increases in deposit interest rates might result in higher loan interest rates as well. This will, in turn, put more financial pressure on enterprises which are already facing capital-related problems and slow order recovery.

A manager of a commercial bank in HCMC shared that it is impossible for such a rise in loan interest rate at present since it would make credit growth more challenging.

Military Bank Securities JSC (MBS) said that most of these deposit interest rate increases happen in small and medium-scale banks. It predicts a rise of about 0.5-0.7 percent among major banks until the end of this year, whereas loan interest rates will maintain their current figures because the banking industry and state management units are trying to help businesses in need to approach credits more conveniently.

According to Standing Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu, SBV is encouraging decreases in loan interest rates as long as these drops are corresponding with the context of the macro economy and inflation is well controlled.

Therefore, SBV will not adjust the operating interest rate but maintain it at the current level. Simultaneously, it is urging commercial banks to cut costs in order to lower actual loan interest rates via incentive packages or specialized credit packages.