Due to excess liquidity and a desire to stimulate credit growth, the input and output interest rates at banks are all low.

Bank interest rates are beneficial for borrowers. Source: Internet

Difference in input interest rate

According to asurvey, during the period before and after the Lunar New Year, many banks reduced interest rates slightly forall terms. Eximbankh as the highest savings interest rate at 8.4%/year, but only applies to savings deposits of VND500 billion or more for long terms of 13 and 24 months. Followed by ABBank with a savings interest rate of 8.3%/year for a 13-month term. OCB also offers high interest rates up to 8.2%/year, but also applies to savings from VND500 billion or more at a term of 13 months.

There was also a change in the mobilizing interest rates for longtermsatsome other banks, such as VietBank with 7.8%/year; ACB: 7.4%/year; SCB: 7.3%/year; Viet A Bank: 7.2%/year; Kienlongbank and Techcombank 7.1%/year.

But to receive such high interest rates, the condition that most banks offer is that customers have to save up to several hundred billion dong and have to deposit for long terms of over 13 months.

For the short term, the highest 1-month interest rate was 4%/year, atSCB and SeABank. For a 3-month term, SHB is listing the highest interest rate in the banking system with arate of 4.05%/year. For a 6-month term, the highest interest rate is 6.5%/year, atCBBank.

Notably, the deposit interest rate is a big difference between small and large banks. For example, four banks that account for the majority of market share today, namely BIDV, Vietcombank, VietinBank, and Agribank, are listing deposit rates from 1% to nearly 3% lower than small banks. Specifically, BIDV, VietinBank, and Agribank all have the highest interest rate of 5.6%/year, while Vietcombank has the highest interest rate of 5.5%/year for a 12-month term.

According to financial and banking experts, in previous years, deposit interest rates tended to increase before and after the Lunar New Year in order to mobilize idle capital from employees' salaries and New Year bonuses. However, this year, the interest rates on deposits have been continuously on a downward trend due to the fact that banks still have excess capital sources since the end of 2020, due to the impact of the Covid-19 pandemic, which weakens the demand for credit.

Beneficial for borrowers

Of course, along with the decline of the deposit rate, the lending rate will also decrease. As a result, banks have continuously announced reductions for lending interest rates, as well as many credit stimulus programs for production and business and consumer credit.

Recently, Vietcombank decided to simultaneously reduce interest rates for all existing loans and new loans of customers for a period of three months from February 22, 2021 to May 22, 2021. Specifically, for corporate customers, up to 10% reduction in interest payable on bankswas offered for thoseheavily affected by Covid-19. Up to 5% discount on bank interest payable for remaining customers affected by the pandemic.

Reduce the interest rate by 0.2%/year for individual customers to borrow capital for production and business before the impact of the pandemic. It is expected that the total number of customers with interest rate reduction this time is about 105,000 with a credit scale of VND350,000 billion, accounting for over 40% of Vietcombank's outstanding loans.

In addition, many banks have launched consumer loan programs with great incentives. For example, ACB deployed many consumer loan products with preferential interest rates reduced by 0.5 -1.5% compared to 2019. MSB also announced a credit package of VND7,000 billion, interest rates from 6.99 %/year for individual customers.

In particular, many banks have launched attractive promotions "targeting" those who want to buy cars. Specifically, BacABank is implementing the program "Quick car loan - Get special offers", with a limit of up to VND500 billion, interest rate from only 5.6%/year. Flexible loan period up to 120 months, loan limit of 100% of car value, diversified collateral - allowing maximum loan ratio of 75% of collateral value and infinite prepayment fee same offer.

MB Bank and VinFast Production and Business Co., Ltd. (Vinfast) launch the program "Vinfast car loan - super preferential interest rate 0%". BaoVietBank also continues to extend the Easy Car 2021 program with outstanding incentives for individual customers who buy cars for consumption and business purposes until December 31, 2021.

According to SSI Securities Company, interest rates will escape the bottom and go up this year when credit growth is higher and the economy recovers. SSI estimates that credit growth in 2021 will be in the range of 13-14%, higher than the rate of 12.13% in 2020. According to Rong Viet Securities Company (VDSC), inflation in 2021 is expected at 3.5%, deposit interest rates are close to historical lows, but interest rates may still decrease further due to the impact of policy lag.