Viet Capital Bank on October 21 announced to raise interest rates for Vietnam dong deposits by 20 basis points. The bank now applies an annual rate of 6.5% to deposits with a term of seven months, 6.6% to eight months, 6.7% to nine months, 6.7% to 10 months and 6.8% to 11 months.
A day earlier, Eximbank launched a promotional program in which holders of savings accounts of 15 months or longer are entitled to an interest rate bonus of 10 to 50 basis points. The program runs till the end of this year.
Under the program, deposits of 15 months or longer at Eximbank carry an interest rate of around 7% per annum. The lender also has gifts available for customers who deposit VND30 million (US$1,346) or more.
Techcombank has also revised up savings rates by 0.19 to 0.29 percentage point for tenors of three to 18 months. Its current interest rate for the 12-month tenor is 6.08%.
Since early this month, Sacombank has raised interest rates for tenors of four months and seven to 11 months by 10 to 30 basis points. The lender has kept the rate for the 13-month tenor unchanged while offering a higher rate of 7.55% for 13-month deposits worth from VND500 billion.
The recent developments show banks want to raise long-term capital to make more medium to long-term credit available. As citizens are still fond of opening short-term savings accounts, interest rates would continue to rise.
According to a deputy general director of a small bank, the bank has just revised up the rate for the one-month tenor by 10 basis points though it has enough funds to lend. The lender has been compelled to increase rates to retain customers.
There is a low possibility that interest rates could edge up strongly from now to the end of this year. Banks are seen maintaining the current rates, the banker said.
Nguyen Thanh Toai, deputy general director of ACB, said banks usually raise interest rates in the final months of year to prepare sufficient funds to lend in the lead up to the traditional Lunar New Year holiday, or Tet.
In recent months, some banks have repeatedly adjusted deposit rates but at a slight pace. One-year deposits now have rates of 6-7%.
According to the State Bank of Vietnam, the rate in the first week of October was 0.8-1% per annum for demand deposits in Vietnam dong and tenors under one month, 4.5-5.4% for one month to less than six months, 5.4-6.5% for six to less than 12 months and 6.4-7.2% for over 12 months.
Interest rates for short-term credits in priority sectors ranging from 6% to 7% while medium and long-term loans are subject to rates of 9-10%. Normal corporate borrowers take out short-term loans at rates from 6.8-9% and medium and long-term credits at 9.3-11%.