HANOI: While savings interest rates have shown signs of cooling down, the rates on certificates of deposit (CDs) have kept rising by 0.1 to 0.3 percentage points per year.
Following the State Bank of Vietnam’s deposit rate cut directive last week, 20 banks have lowered their over-the-counter savings rates for six-month terms by 0.5 percentage points from the Oct 16 level.
However, the interest rates for CDs have continued to rise.
MB Bank is offering a rate of up to 8% per annum on three-month CDs for deposits of 300 million Vietnamese dong or more, 3.25 percentage points higher than the rate for a standard savings account of the same term. For deposits of one billion Vietnamese dong or more, the annual rate can reach 9.4%.
Similarly, VPBank is offering CD rates of up to 9% per annum, while BVBank provides a maximum rate of 8.2% per annum for terms ranging from six to 12 months.
The high CD rates showed that competitive pressure to attract capital remains, even as the general level of savings interest rates trends downward.
Truong Dac Nguyen, founder of investment firm Truong Nguyen, noted diverging interest rate trends across various deposit products.
While interest rates for standard savings accounts have edged downward, rates for other channels have continued to rise, signalling that banks remain driven by a need to secure capital, even at a higher cost.
Echoing this view, experts at SSI Research anticipated that the issuance of CDs and bonds will continue to accelerate, serving as an additional tool to help narrow the gap between credit growth and deposit mobilisation.
This shift indicated that banks are increasingly raising capital through longer-term instruments, which can help stabilise their funding bases and support the expansion of medium- and long-term credit.
However, a heavy reliance on CDs, particularly those with longer tenors, could also drive up the cost of capital if the issuance rates exceed those of conventional deposit products. — Viet Nam News/ANN
