Banks set new peak for long-term deposit rates

 

Banks set new peak for long-term deposit rates

Some banks have increased the deposit interest rates for savings of a term above 12 months to 13 percent a year from the 12 percent peak they offered last June.

Banks have joined in the race to offer high interest rates for deposits of 12-month term and above as of June 8, when the State Bank of Vietnam removed the cap slapped on deposits under that category.

Meanwhile savings of terms between 1 and 11 months are still restricted under the ceiling of 9 percent a year.

ACB is offering 13 percent rate for 13-month deposits, while 12.5 percent rate is granted to 12-month savings.

The respective interest rates offered for the 13- and 12-month terms at Eximbank are 12.8, and 12.3 percent a year.

Increasing interest rates for long-term savings is made in a bid to acquire a stable source of capital, from which banks can offer more lending during the remaining months of the year, where demands for loans are high.

However, some industry insiders said the move came after lending activities on the interbank market were tightened under a new circular issued by the State Bank of Vietnam (SBV).

Failing to mobilize capital from the interbank market, banks thus had to turn to the public market, insiders said.

Transactions in the dong on the interbank market during the tightened rule’s first week of application dropped 58 percent week on week, while the respective figure of transactions in the US dollar was 55 percent, according to a SBV report.

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