Banks are lowering interest rates to support customers and stimulate credit demand.
Following an emergency meeting between the State Bank of Vietnam and the banking system (February 25th) aimed at finding solutions to reduce interest rates and support businesses and individuals in accessing credit, many banks have lowered deposit and lending interest rates.
Many banks are lowering deposit interest rates.
Currently, the deposit interest rate charts of banks show that deposit interest rates are trending downwards compared to the previous month, with a decrease of 0.1-0.7%. Many banks have moved away from the 6%/year mark following directives from the Prime Minister and the State Bank of Vietnam to stabilize deposit interest rates and reduce lending interest rates.
At VIB Bank, interest rates for time deposits at the counter are as follows: 1 month at 3.6%/year; 2 months at 3.7%/year; 3-5 months at 3.8%/year; 6-11 months at 4.6-4.7%/year; 12-15 months at 5%/year; 18 months at 5.1%/year; and 24-36 months at 5.2%/year. Interest rates for online deposits are slightly higher.
At Vietbank, deposit interest rates for short-term maturities under 6 months have also decreased. Specifically, the online savings interest rate for a 1-month term decreased by 0.2%/year to 4.1%/year; the 2-month term also decreased to 4.1%/year. Similarly, the 3-month term decreased by 0.2%/year to 4.4%/year. The bank also applied a new interest rate schedule for 4-5 month terms, reducing it by 0.1%/year to 4.5%/year.
According to the State Bank of Vietnam's Region 8 branch, some banks have recently had to adjust deposit interest rates due to pressure to attract capital, ensure liquidity, and maintain stable operations. However, all are committed to strictly adhering to the directives of the Government and the State Bank of Vietnam regarding cost reduction and implementing measures to lower lending interest rates to support businesses and individuals.
By the end of February 2025, mobilized capital in Nghe An province is estimated to reach VND 279,744 billion, an increase of VND 9,981 billion, or 3.7%, compared to the beginning of the year. At the beginning of 2025, credit growth across the entire system showed more positive signs compared to the same period last year. While in the first quarter of 2024, the total outstanding loans of credit institutions in Nghe An province only increased by 0.9% compared to the beginning of the year, by the end of February 2025, the total outstanding loans are estimated to reach VND 333,841 billion, an increase of 2.65% compared to the beginning of the year.
Lowering lending interest rates stimulates economic development.
Currently, many banks are reducing lending interest rates to stimulate consumption, thereby creating momentum for production and business development, and simultaneously boosting credit demand. The home loan market is establishing a low interest rate level. Commercial loans for homebuyers currently have an average interest rate of 5.5-6.2% per year, applicable for the initial loan term ranging from 6 to 24 months.
Agribank's Nghe An branch currently offers a loan program to meet living needs with preferential interest rates starting from only 4.5% per year. This financial solution from Agribank has a scale of 30,000 billion VND, dành for individual customers borrowing capital to pay for expenses related to consumption and living costs such as buying a house, buying a car, shopping, investing, medical treatment, travel, weddings, etc. Meanwhile, BIDV applies interest rates from 5-5.5% per year for customers in Hanoi and Ho Chi Minh City and 6-7% per year for customers in other provinces and cities. Most banks currently offering home purchase loans have a common term of 25 years.
In particular, public attention has recently focused on HDBank's launch of a home loan product with a repayment period of up to 50 years – the longest on the market today – and interest rates ranging from 4.5-7.5% per year for the first 12-24 months. Mr. Nguyen Manh Ha, Director of HDBank's Nghe An branch, stated that HDBank supports home loans, real estate loans, construction loans, and home renovation loans up to 90% of the required capital, with a repayment period of up to 50 years for residents of Nghe An province. This program was implemented by HDBank following the guidance from the Government's Standing Committee meeting with commercial banks on February 11th.
With a capital scale of up to 30,000 billion VND, the program helps borrowers, especially young customers, alleviate financial pressure, proactively balance their income, and have additional resources for other essential needs. Loan conditions are also very flexible: Collateral must be real estate or apartments in Ho Chi Minh City, Hanoi, and 22 first-tier cities nationwide. Customers can use the loan capital to purchase homes throughout the country. Importantly, loans can be disbursed up to 90% of the collateral value, helping customers quickly own a home without facing significant financial obstacles.
At the interest rate meeting held on the afternoon of February 25th, Deputy Governor Pham Thanh Ha stated that, in order to implement the Government and Prime Minister's directives on continuing to implement solutions to reduce lending interest rates, alleviate difficulties for customers, support people and businesses in developing production and business, and promote growth, and to ensure the national GDP growth target of 8% or higher in 2025, relevant units will seriously and decisively implement key tasks and solutions in the coming period.
The move by banks to lower lending interest rates is attracting public attention and anticipation. However, banks need to disclose the mechanism for calculating interest rates after the preferential period to reassure borrowers, instead of leaving rates "floating" after a short preferential period as has been the case for a long time.