Customers make transactions at a Vietcombank office in Hà Nội. Interest rate for short-term deposits from 1-2 months at Vietcombank is currently only 1.9 per cent per year, a decrease of 0.3 percentage points compared to the previous week. — Photo tapchitaichinh.vn

Vietcombank has announced a new interest rate list this week that surprised the market. Accordingly, the bank’s interest rate for short-term deposits from 1-2 months is currently only 1.9 per cent per year, a decrease of 0.3 percentage points compared to the previous week. This is the new bottom of deposit interest rates in the market. The interest rate for long-term deposits of 12 months or more at Vietcombank remains at 4.8 per cent per year.

Among the four largest State-owned banks, including Agribank, Vietcombank, VietinBank and BIDV, Vietcombank currently applies the lowest deposit interest rate.

Agribank follows with a deposit interest rate of 2.2 per cent per year for short-term deposits of 1-2 months. If customers deposit 12 months or more, the interest rate at Agribank is 5 per cent per year and the highest is 5.3 per cent per year for a 24-month term.

VietinBank and BIDV apply the same interest rate for 1-2 month deposits at 2.3 per cent per year. Customers depositing for a term of 3-6 months at the two banks will receive an interest rate of 2.9 per cent per year. The highest interest rate at the two banks is 5.3 per cent per year when customers deposit for 24 months or more.

Interest rates have dropped to low levels, making many depositors wonder which term to choose because interest rates for terms of 6 - 12 months or more do not differ too much. Even at some small-sized banks, which used to offer deposit interest rates of 9-10 per cent per year about a year ago, the rate is currently also only around 5-5.5 per cent per year.

According to industry insiders, capital mobilised from the end of 2022 with high interest rates of 9-10 per cent per year has almost matured. Therefore, capital raised at lower prices in 2024 will help lending interest rates decrease faster this year.

Vietcombank Securities Company (VCBS) said deposit interest rates have dropped deeply and there is little room for further reduction. However, in the period when the economy is recovering, the current low deposit interest rates need to be maintained to pull lending interest rates down further.

According to Dr. Nguyễn Văn Thuận from the University of Finance and Marketing, an interest rate of 5 per cent per year or more for 6-12 month deposits is reasonable as it is higher than next year's 4-4.5 per cent inflation target to ensure a profit for depositors. Banks must maintain deposit interest rates higher than the inflation rate to attract depositors to meet the capital needs of the economy.

VCBS forecasts lending interest rates may decrease by another 1-1.5 percentage points in 2024. Banks will consider further lowering lending interest rates for some firms, which have good business prospects, to help the borrowers restructure debts and overcome difficult times.

Dr. Đỗ Thiên Anh Tuấn, lecturer at the Fulbright School of Public Policy and Management, said the lending interest rate in 2024 will likely decrease in accordance with the recent declining rate of savings.

Tuấn suggested that at this time, firms should be decisive in accessing cheap capital when the domestic and foreign economies show signs of recovery.

Monetary policy needs to be managed appropriately in the direction of balancing the capital needs of firms and the savings needs of people. From there, the State Bank of Vietnam will maintain interest rates at a reasonable level to promote credit with an aim to support economic growth, Tuấn proposed. — VNS