Household savings hit record as high interest rates attract idle money

Household savings hit record as high interest rates attract idle money

The increase comes as deposit rates have risen steadily since late 2025, encouraging households to move idle funds into bank savings for capital preservation and higher returns amid subdued performance in the stock, property and gold markets.

A customer conducts a transaction at an Agribank branch. Household deposits at banks reached a new high of VNĐ10.8 quadrillion (US$414 billion) at the end of May. — VNA/VNS Photo

Household deposits at credit institutions climbed to a new record at the end of May, as higher deposit rates and weak returns from other investment channels encouraged savers to keep their money in the banking system.

The latest updates by the State Bank of Vietnam (SBV) show that household deposits at banks reached a new high of VNĐ10.8 quadrillion (US$414 billion) at the end of May, up more than VNĐ108 trillion from April and increasing by 4.76 per cent from the beginning of the year, equivalent to nearly VNĐ492 trillion.

This increase comes as deposit rates have risen steadily since late 2025, encouraging households to move idle funds into bank savings for capital preservation and higher returns amid subdued performance in the stock, property and gold markets.

Corporate deposits, meanwhile, stood at more than VNĐ6.16 quadrillion at the end of May. While they rose by VNĐ92.3 trillion from the previous month, they remained about VNĐ12 trillion, or 0.2 per cent, below the level recorded at the end of 2025.

The SBV's report shows that average deposit rates in June ranged from 0.1–0.2 per cent per year for demand deposits and terms of less than one month, 4.0–4.6 per cent for one- to under six-month deposits, 6.1–7.6 per cent for six- to 12-month terms, 5.9–7.3 per cent for deposits of more than 12 months to 24 months and 7.1–7.8 per cent for terms exceeding two years.

Several commercial banks are currently offering effective rates of more than 9 per cent per year for six-month deposits through promotional programmes and online channels.

External factors, including interest rate policies by the US Federal Reserve and the Bank of Japan, as well as exchange rate volatility, are also limiting room for domestic deposit rates to decline, he pointed out.

SBV data shows that outstanding credit reached nearly VNĐ20.1 quadrillion as of July 13, up 7.86 per cent from the end of 2025.

Deposit mobilisation is lagging credit growth by about two percentage points, meaning that the banking system is facing a funding shortfall estimated at up to VNĐ2 quadrillion, forcing banks to rely on other funding sources to bridge the difference, the central bank said.

Đào Minh Tú, vice chairman and secretary general of the Vietnam Banks Association, said the banking system is facing a mismatch between capital supply and demand, as funding needs continue to outstrip deposit growth.

The challenge is not liquidity or banks' ability to meet deposit withdrawals, but how to maintain a sustainable funding structure to support robust credit demand.

To address funding pressures, banks have stepped up competition for deposits by raising interest rates, offering promotional schemes, issuing high-yield certificates of deposit and increasing bond issuance to strengthen medium- and long-term funding.

Đặng Ngọc Đức, director of the Institute of Financial Technology at Đại Nam University, said the banking system faces a structural maturity mismatch, with around 80 per cent of deposits concentrated in terms of less than six months, while demand for medium- and long-term lending remains strong.

Analysts at MB Securities (MBS) said the gap between credit and deposits widened by more than 40 per cent from the end of 2025, keeping the banking sector's overall loan-to-deposit ratio high and increasing liquidity pressure.

MBS said the gap between deposit mobilisation and credit growth is unlikely to narrow in the short term.

Banks will therefore need to maintain attractive deposit rates to strengthen funding, ease liquidity pressure and comply with prudential requirements, the company said.

While lending rates could ease selectively for priority sectors such as manufacturing and exports in the second half of the year, deposit rates are expected to remain elevated and may only edge lower toward the end of the fourth quarter if liquidity conditions improve significantly.

Deputy Prime Minister Nguyễn Văn Thắng at the Government’s meeting in May asked the banking sector to keep lending rates as low as possible, particularly for priority sectors, to support businesses and economic growth. 

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