Analysts say the profits from bank deposits in 2019 were higher than other kinds of assets, but it was just at an average level.

Bank deposits, for example, brought higher profits than the dollar in 2019.

Hoarding dollars occurred in previous years when the dollarization level in the economy was high and the market witnessed unexpected sharp devaluations of the dong.

However, in 2019, the dong/dollar exchange rate was stable, with the dong value having depreciated by less than 1.5 percent by the end of 2019. The dollar price in the black market even went down at some moments.

Many people chose to make deposits at banks with the interest rates of 4.3-5 percent per annum for 1-6-month deposits, 5.3-7 percent for 6-12 month deposits, and 6.6-7.5 percent for over-12-month deposits.

The stock market experienced a tough 2019 with the VN Index increasing modestly by 7 percent.

This means that if investing in securities, investors would be able to expect profit equal to the 12-month term bank deposit interest rate. It is riskier to invest in securities than to deposit money at banks.

The property market also witnessed a year of difficulties as real estate credit was tightened by commercial banks. The low liquidity, complicated procedures and high legal risks also made investors shrink.

In 2019, many investors suffered as the developers of some condotel projects broke their commitments about expected profits. Cocobay Da Nang was an example.

Analysts have warned that the market may enter a hibernation period in the time to come after experiencing a long period of price increase in the last many years.

For these reasons, many people chose to make deposits at banks with the interest rates of 4.3-5 percent per annum for 1-6-month deposits, 5.3-7 percent for 6-12 month deposits, and 6.6-7.5 percent for over-12-month deposits.

This explained why in 2019, the growth rate of mobilized capital was always high, at 12.5 percent, higher than the 11.3 percent of the same period 2018.

Analysts affirmed that except for the gold market which saw a sharp rise of 16 percent in 2019, making long-term deposits at banks was more profitable than other investment channels.

However, bank deposits were not attractive as the GDP growth rate was 7.02 percent in 2019, and deposit interest rates 5-7 percent, or lower than the GDP growth rate.

Kim Chi 

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