Commercial banks have persistently reduced deposit interest rates, resulting in rates for many terms now standing at just above 6% per annum.

In line with this trend, Military Bank (MB) has revised its rates downward by 0.1-0.2 percentage point per year as of August 15, 2023. Significantly, the 12-month term interest rate at MB has fallen to a mere 6.1% per annum. This represents the lowest deposit rate within the banking system, and is even lower than the interest rate for the equivalent term at the four largest State-owned commercial banks: Vietcombank, VietinBank, BIDV, and Agribank.

Interest rates for other terms at MB have been set as follows: 4-4.2% per annum for 1-3 month deposits; 6-6.1% per annum for 6-9 month deposits; and 6.4-6.6% per annum for 13-36 month deposits. Notably, the 6.6% rate is the highest deposit interest rate offered by MB, and this applies to customers making deposits of 24 months or longer in the central and southern regions of Vietnam.

This week has also seen several other banks, including BaoVietBank, GPBank, and VIB, lowering their interest rates by 0.1-0.5 percentage point.

Specifically, the highest interest rate at BaoVietBank is only 7.4% for customers who deposit online for a term of 24-36 months and receive interest at the end of the period. BaoVietBank applies an interest rate of 4.4-4.75% per year for terms of less than 6 months and 6.8-7% per year for a term of less than 12 months.

Similarly, at GPBank, the highest interest rate has decreased by 0.4 percentage point per year compared to last week to only 6.95% per year for terms of 13 months or more when depositing online. Interest rates for 6- and 12-month deposits have also decreased to 6.65% and 7.25% per year, respectively.

At VIB, the highest deposit interest rate was down from 6.9% per year in early August to 6.7% per year currently. The rates for 6-month and 12-month deposits at VIB also see similar reductions to 6.4 and 6.5% per year

Previously, many banks, such as SHB, and HDBank, reduced their deposit interest rate by 0.1-0.2 percentage point per year. In which, SHB applies the online deposit interest rate of only 6.7% per year for the terms from 6 to 8 months; 6.8% per year for terms of 9-11 months and 6.9% per year for terms of 12 months or more.

At VietABank, the interest rate for deposits from 6 to 11 months is 7% per year and 7.3% per year for 12-18 month deposits.

HDBank has also reduced its highest interest rate to 9.1% per year from 9.3% per year as applied previously for customers depositing 300 billion vND or more with a term of 13 months. For 13-month deposits worth under 300 billion VND, the interest rate at HDBank is 7.35% per year. With a term of 12 months, HDBank applies an interest rate of 8.6% per year for deposits of 300 billion VND or more and 7% per year for deposits of less than 300 billion VND.

Currently, the deposit interest rate of more than 7% per year is only listed at a few banks such as DongABank, Viet A Bank and NCB. Only DongABank is listing the highest interest rate in the banking market at 8.3% per year, applicable to deposits of more than 1 billion VND with 13-month terms.

Deposit interest rates at commercial banks have started to cool down since the end of the first quarter of 2023 and fell deeply after four policy interest rate cuts made by the State Bank of Vietnam (SBV), which is expected to create more room for banks to continually cut lending interest rates.

The SBV early this week also directed commercial banks to continually reduce lending interest rates by 1.5-2 percentage points per year at a minimum for both outstanding loans and new loans.

Under Document No. 6385/NHNN-CSTT, the SBV requires banks to report their commitment to reducing lending interest rates in 2023 for outstanding loans and new loans before August 25 this year and the results of their commitments before January 8 next year./.