Despite low interest rates, individual customers have continued to deposit at banks, setting a new record high for savings. 

The latest data of the State Bank of Vietnam (SBV) released this week shows deposits of individual customers increased by more than VNĐ39.7 trillion in April, to reach more than VNĐ6.7 quadrillion. Accumulated from the beginning of this year, deposits of individual customers increased by more than VNĐ183 trillion, or 2.8 per cent.      

Deposits of corporate and economic organisations in April also grew positively. Specifically, the group's deposits rose by more than VNĐ81 trillion in April, reaching more than VNĐ6.7 quadrillion. However, due to a sharp decrease in January and February, the group's deposits dropped by more than VNĐ133 trillion, or 1.95 per cent, in the four months of this year. 

The SBV’s data also shows that total means of payment by the end of April 2024 reached more than VNĐ16 quadrillion, up 0.13 per cent from the beginning of the year.

Banks have also continuously increased savings interest rates over recent months to attract depositors. A macroeconomic report for July 2024 released recently by the MB Securities Company (MBS) shows that in June, commercial banks simultaneously adjusted deposit interest rates by about 0.1-0.5 percentage points. 

In June, 24 domestic commercial banks increased deposit interest rates, and many banks continued to adjust their rates in July, such as Eximbank, NCB, SeABank, BaoVietBank, and Saigonbank. Notably, some banks increased the rates for deposits under six months to 4.7 per cent per year, close to the cap of 4.75 per cent per year prescribed by the SBV. 

The move to increase deposit interest rates has come in the context that credit increased sharply by 4.45 per cent by June from 2.4 per cent at the end of May. This has motivated banks to increase savings interest rates to attract deposits to meet capital needs.

MBS believes that deposit interest rates will increase slightly by 50 basis points in the second half of 2024, as credit demand will continue its stronger upward trend from mid-2024 as production and investment accelerates more strongly in the final months of the year. MBS forecasts that the 12-month deposit interest rate of large commercial banks will be able to move up by 50 basis points to 5.2-5.5 per cent in the second half of 2024.

Despite the deposit interest rate hike, MBS forecasts the lending interest rates will remain at the current levels as the SBV and commercial banks will make efforts to support businesses in having access capital. — VNS