Banks down saving interest rates right after Tet

The race of interest rate hikes among commercial banks is showing signs of cooling down as many banks have adjusted down the rate by several percentage points per year after the Lunar New Year (Tet) holiday and have set stricter conditions for customers to enjoy the high rates.
Banks lower saving interest rates right after Tet
A Techcombank transaction office in Hanoi. (Photo: Techcombank)

At Techcombank, the highest deposit interest rate at the bank is currently 9.2% per year, against 9.5% per year before Tet. To enjoy the 9.2% interest rate, depositors must be a VIP customer with minimum savings of 3 billion VND over 12 months. For regular customers, the rate for 6-month deposits at the bank is also down to 8.5% per year from more than 9% before Tet.

At Sacombank, the highest interest rate before Tet was 9.8% per year. However, the highest rate is currently only 9.2% per year, applied to online deposits with terms from 15 to 36 months.

Saigonbank, which was the first bank to list a deposit interest rate of up to 10.5% per year last year, also lowered the savings interest rate. Accordingly, the highest interest rate at the bank is only 9.5% per year, applicable to 13-month deposits, both online and at the counter.

The same move was seen at BaoVietBank. Before Tet, customers could receive the highest interest rates of 9.8%, 10.2% and 10.3% per year for six-month, 13-month and 15-month terms, respectively, under a special savings deposit. However, the programme has ended and the rate of more than 9% is currently only applied on online channels.

Specifically, when depositing through EzSaving/ BAOVIET Pay for a 6-month term, customers can receive the highest interest rate of only 9.3% per year. For terms of 13 and 15 months, the rate is 9.4% and 9.5%, respectively.

Some other banks also lowered their highest interest rates such as DongABank (from 9.85% to 9.5% per year); BacABank (from 9.8% to 9.5% per year); and VietCapitalBank (from 9.5% to 8.9% per year).

At the four biggest banks BIDV, VietinBank, Agribank and Vietcombank, interest rates, in general, have not changed much compared to before Tet. BIDV and VietinBank both are listing the highest interest rate of 8.2% per year while the figure at Agribank is 7.9% and Vietcombank 7.4%.

According to experts, savings at banks declined in the fourth quarter of last year due to the seasonal factor of Tet when firms concentrated capital to produce goods and pay year-end bonuses to employees while individuals also often reserved more cash to spend for Tet. At that time, banks had to increase interest rates to lure deposits to ensure liquidity.

However, after Tet when cash flows into banks again, the banks’ liquidity is under less pressure. Therefore, banks also do not need to raise deposits with high interest rates.

According to finance expert Dinh The Hien, cash will continue to flow into banks as the savings rates remain high compared to those of previous years.

Deposit interest rates in the first quarter of 2023 will be commonly at 6.5-7% per year at large-sized and good-quality banks and 8-9% at small-sized banks, Hien forecast, expecting that by the end of the second quarter of 2023, the interest rate will return to the normal level at around 7% per year.

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(Source: VNA)