Just some months ago, banks vied to attract deposits, offering sky-high interest rates of approximately 9 percent per annum. But now, only a few banks pay 7 percent per annum.

State-owned banks pioneered the interest rate cut movement. Vietcombank lowered the interest rates by 0.3 percent for 1- and 2-month term deposits to 3.7 percent per annum, and cut the interest rate by 0.5 percent for 6- and 12-36 month term deposits. The highest interest rate offered by the bank is 6.1 percent for 24-month deposit.

Meanwhile, at BIDV, the highest interest rate now is just 6 percent per annum after the bank slashed interest rates by 0.3-0.5 percent per annum.

Agribank and VietinBank, the other two in the ‘big four’ banks, have also cut interest rates.

The move by the four state-owned banks was followed by joint stock banks. The 7 percent interest rate is no longer seen in the bank’s interest rate table. The current highest interest rate is 6.9 percent per annum, applied to 15- and 18-month term deposits.

The move by the four state-owned banks was followed by joint stock banks. The 7 percent interest rate is no longer seen in the bank’s interest rate table. The current highest interest rate is 6.9 percent per annum, applied to 15- and 18-month term deposits.

At Sacombank, the 1-month deposit interest rate fell to below 4 percent per annum and 6-month interest rate to 5.7 percent. The 6.7 percent interest rate is applied to 24-month and longer deposits.

As for Nam A, though the bank has made a similar move, its interest rates remain relatively high, 7.1-7.2 percent per annum, applied to 12-month and longer term deposits.

According to Tuoi Tre, some small joint-stock banks which previously offered the high interest rate of 8 percent for long-term deposits, now apply an interest rate to 13-month deposits worth VND500 million or higher.

Since the input capital cost has decreased, banks have also slashed lending interest rates as well.

BIDV said on July 1, it cut the lending interest rate by another 0.5 percent to help the economy overcome the difficulties caused by Covid-19.

As such, the bank has on three occasions eased the lending interest rates by 2.5-3 percent this year.

Analysts said the 0.5 percent is a sharp cut for state-owned banks because these banks always set interest rates lower than the average rate of the whole banking system.

Vietcombank has not made an announcement about interest rate cuts since the beginning of July, but the bank is running a program on reducing the interests payable, which lasts from May 15 to July 31.

It is expected that 85,000 borrowers with total outstanding loans of VND64 trillion will be the beneficiaries from the program.

Kim Chi 

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