HANOI: The decrease in bank deposit interest rates has made savings less attractive, as customers have been gradually withdrawing money from banks to find other investment channels.
According to statistics released by the State Bank of Vietnam (SBV) last week, deposits from economic organisations have decreased after five consecutive months of increases, causing bank lending to decline.
Specifically, deposits from economic organisations have decreased by 3.04% compared with the end of last year.
The decrease in deposits comes as savings interest rates have been declining continuously since after the Lunar New Year holiday.
On Feb 25, the SBV held an urgent meeting with commercial banks and instructed them to cut deposit interest rates.
The meeting came after Prime Minister Pham Minh Chinh issued a directive for the SBV to inspect commercial banks that increased their deposit interest rates and strictly handle violations.
Immediately after the meeting, banks lowered their deposit interest rates.
From Feb 25 to April 14, 27 banks adjusted their deposit interest rates down, with a reduction of between 0.1 and 1.05 percentage points per year, depending on the term.
Currently, only a few banks, including GPBank, Vikki Bank and HDBank, maintain deposit interest rates above 6% per year.
An investor who declined to be named said that the current savings interest rate was around 6% per year, while the price of gold bars and gold rings was anchored at historical peaks.
Since the beginning of this year, the price of gold bars had increased by more than 22 million dong per tael (37.5g), equivalent to a net increase of more than 26%.
Many people had therefore withdrawn their savings to buy gold. — Viet Nam News/ANN
