Bank deposits increase following the rise in interest rates | Business

A customer makes a deposit at a bank in Hanoi. Deposits in banks increased by 1.38% to nearly VND 11.1 quadrillion in the first two months of 2022. (Photo: VNA)

Hanoi (VNS/VNA) – Thanks to the increase savings interest rates, deposits with banks rose sharply in the first two months of this year after falling last year.

According to the latest data from the State Bank of Vietnam (SBV), deposits grew by 1.38% to nearly VND 11.1 quadrillion in the first two months of 2022.

Among the total, deposits from individuals reached over VND5.46 trillion, up over VND56 trillion from January 2022 and VND159.6 trillion from December 2021.

Corporate client deposits amounted to over VND5.63 quadrillion, down VND8.8 trillion from December 2021.

Last year, individual customer deposits at banks declined as many depositors withdrew their savings to seek more attractive investment channels amid falling interest rates on deposits.

Experts have attributed this year’s growth to banks’ implementation of programs to raise deposit interest rates to attract depositors. Interest rates on deposits at many banks have so far increased by 0.3-0.7% compared to the end of last year.

More recently, VPBank announced the new list of savings interest rates for individual customers from April 15. Specifically, the highest savings interest rate in
bank has been increased from 6.7% per annum to 6.9% per annum, applicable to online savings over VND 50 billion over a 36-month term. For smaller deposits, the new interest rate level at VPBank ranges from 6.1% to 6.7% per annum, up 0.4 to 0.6 percentage points from previously.

Similarly, the 12-month and 24-month savings rates at VPBank both increased by 0.4 to 0.6 percentage points after the adjustment.

At MBBank, new interest rates on savings have been applied since April with an increase of 0.2 percentage point on short terms of one to three months and on long terms of 36 months. The highest rate at the bank is currently 6.6% pa, down from 6.4% pa as in March.

Many other banks have also increased savings interest rates for retail customers such as Techcombank, NamABank, OCB, SCB, LienVietPostBank, HDBank and ACB.

Experts said the decision to raise interest rates on deposits in banks during this period is understandable as demand for credit increases dramatically. Credit increased by 5.04% at the end of March 2022, i.e. 2.3 times more than in the same period last year. This figure reflects the rapid increase in demand for capital to serve production and business after a long period of stagnation due to the pandemic.

Saigon Securities Incorporation recently raised its forecast for credit growth in 2022 to 14.5-15%, 0.5-1 percentage point higher than its previous forecast. This will create significant pressure on savings and loan interest rates in the near future.

In the latest macro report, VNDirect Securities Company also said it will be difficult for savings interest rates to stay low this year due to higher demand for capital raising when credit picks up. . In addition, inflationary pressure and fierce competition from investment channels such as real estate and securities will cause interest rates increase in order to attract idle cash flow.

This year, VNDirect expects interest rates on savings to rise by 0.3-0.5 percentage points and the interest rate on 12-month savings to reach 5.9-6.1% per year by the end of the year, above the current average rate of 5.6% per year. /.

Stephen V. Lee