Savings interest rates are about to continue to decrease
After the interest rate cut in mid-August, some banks have now reduced it further, with some paying interest below 3% for a 1-month term.
In just half of August 2020, many major banks lowered their savings interest rates. Some banks with a 1-month term and deposits at the counter pay interest of 2.85-3.2% per year, 0.3 percentage points lower than half a month ago. This rate is also much lower than the ceiling interest rate of 4.25% allowed under the State Bank's regulations. If customers receive interest in advance, they will only receive an interest rate of 2.7%.
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| Savings interest rates at two other banks have also just decreased by 0.1 - 0.3 percentage points. |
At state-owned banks and other joint-stock commercial banks, the interest rate table remains unchanged from mid-August. For a 1-month term, about a dozen banks are willing to pay interest equal to the ceiling rate of 4.25%. For a 1-year term, the highest interest rate currently is 7.75% with online deposit conditions.
In the context of businesses scaling back operations or hibernating while waiting for the pandemic to pass, banks are in a state of having money but not being able to lend. In Ho Chi Minh City alone, total capital mobilization of credit institutions as of the end of August increased by 4.55% compared to the end of 2019 while credit growth was only 3.68%.
According to the assessment of a leader of a state-owned bank, although interest rates are getting lower, savings deposits flowing into banks are still increasing every day. Gold prices are increasing but investors are not allocating much money to this channel, while the stock market is fluctuating strongly and the real estate channel is quiet, so individuals and businesses with large amounts of cash still mostly keep them in banks.
