Thanks to increases in savings interest rates, deposits at banks increased strongly in the first two months of this year after declining last year.

According to the latest data from the State Bank of Vietnam (SBV), deposits increased by 1.38 per cent to nearly VND11.1 quadrillion in the first two months of 2022.

Among the total, deposits of individual customers reached more than VND5.46 quadrillion, up more than VND56 trillion against January 2022 and VND159.6 trillion against December 2021.

Deposits of corporate customers were more than VND5.63 quadrillion, down VND8.8 trillion against December 2021.

Last year, deposits of individual customers at banks declined as many depositors withdrew their savings to pour into more attractive investment channels amid declining deposit interest rates.

Experts attributed this year’s growth to banks’ application of deposit interest rate hike programmes to attract depositors. Deposit interest rates at many banks have so far increased by 0.3-0.7 per cent against late last year.

Most recently, VPBank announced the new savings interest rate list for individual customers from April 15. Specifically, the highest savings interest rate at the bank was raised from 6.7 per cent per annum to 6.9 per cent per annum, applicable to online savings of more than VND50 billion on the term of 36 months. For smaller deposits, the new interest rate level at VPBank ranges from 6.1 per cent to 6.7 per cent per annum, up 0.4-0.6 percentage points against previously.

Similarly, the 12-month and 24-month savings rates at VPBank both rose by 0.4 0.6 percentage points after the adjustment.

At MBBank, new savings interest rates have been applied since April with an increase of 0.2 percentage points on short terms from one to three months and the long term of 36 months. The highest rate at the bank is currently 6.6 per cent per annum, against 6.4 per cent per annum as in March.

Many other banks have also raised the savings interest rates for individual customers such as Techcombank, NamABank, OCB, SCB, LienVietPostBank, HDBank and ACB.

Experts said the move to increase deposit interest rates at banks during this period is understandable when credit demand is rising significantly. Credit increased by 5.04 per cent by the end of March 2022, 2.3 times higher than the same period last year. This figure reflects the rapidly increasing demand for capital to serve production and business after a long period of stagnation due to the pandemic.

Saigon Securities Incorporation has recently raised its credit growth forecast in 2022 to 14.5-15 per cent, 0.5-1 percentage points higher than its previous forecast. This will create significant pressure on savings and lending interest rates in the near future.

In the latest macro report, VNDirect Securities Company also said it would be difficult for savings interest rates to remain low this year due to higher capital mobilisation demand when credit accelerates. In addition, the inflation pressure and fierce competition from investment channels such as real estate and securities will cause interest rates to increase in order to attract idle cash flows.

This year, VNDirect forecast savings interest rates to rise by 0.3-0.5 percentage points and 12-month savings interest rate to reach 5.9-6.1 per cent per annum by the end of the year, higher than the current average rate of 5.6 per cent per annum. — VNS