State banks break year-long rate freeze with deposit hikes

State banks break year-long rate freeze with deposit hikes

Việt Nam's 'Big Four' lenders boost savings rates as year-end credit demand rises

A client conducts a transaction at Vietcombank headquarters in Hà Nội. Vietcombank, BIDV, Agribank and VietinBank all adjusted their deposit rate schedules for both counter and online transactions. — VNA/VNS Photo

Việt Nam's four largest State-owned banks have raised deposit rates for the first time in nearly a year, breaking a long period of rate stability as banks compete for funding ahead of the year's end.

Vietcombank, BIDV, Agribank and VietinBank all adjusted their deposit rate schedules for both counter and online transactions. VietinBank was the first among the State giants to nudge rates higher earlier this month for online deposits.

The increases push 12-month rates at State banks back to late-2023 levels. Shorter-term rates remain about 0.5 percentage points lower than that period.

Vietcombank, BIDV and VietinBank now offer identical counter rates of 5.2 per cent for 12-month deposits, 3.5 per cent for 6-9 months and 2.1-2.4 per cent for 1-3 month terms. Agribank matches the 5.2 per cent rate for 12-month deposits but pays 0.3 percentage points more for shorter terms.

Online rates at the four banks usually beat counter rates for terms under 12 months, but longer-term online rates run lower, at 4.7-5.3 per cent per year.

Rate increases have spread across the banking sector over the past two months.

Vikki Bank leads with 6.6 per cent for 12-month deposits, closely followed by Bắc Á Bank with 6.55 per cent and VIB with 6.5 per cent. Overall, around 15 banks pay over 6 per cent for a term of 12 months.

According to HCM City University of Economics expert Nguyễn Hữu Huân, this rate increase is mainly seasonal, meeting year-end credit needs. 

He said monetary policy must stay loose to support double-digit growth targets next year. However, exchange rate pressures sometimes force banks to raise rates.

As deposit rates climb, lending rates are rising too. New loan rates at several banks have increased 0.5-1 percentage point from last month. 

Many large banks recently ended cheap loan programmes for home buyers, while some private banks are slowly raising floating lending rates. 

Bizhub