Another round of deposit interest rate cuts coming soon?

The largest bank in the system continues to lower interest rates

According to the interest rate table announced on November 30, Vietcombank reduced the interest rate for all terms by 0.2 percentage points. This is the third time in the past 2 months that this bank has adjusted the interest rate table. With this adjustment, Vietcombank's savings interest rate has reached a record low, also the lowest in the banking system.

Interest rates for 1-month deposits at Vietcombank have dropped to 2.4% per year, and for 3-month deposits to 2.7% per year, down more than half compared to the beginning of the year.

With long terms, from 12 months to 24 months, the highest interest rate at Vietcombank is 4.8%/year while at the beginning of the year it was over 7%/year.

Compared to the beginning of the year, Vietcombank's deposit interest rates for all terms have decreased by 2.6-3 percentage points compared to the beginning of the year. The interest rates for deposits at the counter and online are the same.

	1 month	3 months	6 months	9 months	12 months
Vietcombank	2.4	2.7	3.7	3.7	4.8
VietinBank	3.2	3.6	4.5	4.5	5.3
BIDV	3.2	3.5	4.5	4.5	5.3
Agribank	3.2	3.6	4.5	4.5	5.3

Vietcombank is currently one of four state-owned banks with a deposit balance of over 1 quadrillion VND, the largest in the banking system.

Not only Vietcombank, some other large private banks also adjusted their deposit interest rates down.

According to MB's online deposit interest rate table, deposit interest rates for terms of 1 to 5 months have simultaneously decreased by 0.2 percentage points.

Techcombank has also just applied a new deposit interest rate schedule for individual customers, adjusting it down across a series of terms, by 0.1 percentage points compared to before.

Will interest rates continue to cool down?

According to experts, the fact that banks are moving to lower interest rates could trigger another round of interest rate cuts before the end of this year. In the previous interest rate cut, Vietcombank was also the first to announce a rate cut, and then a series of banks followed suit. Vietcombank is the largest bank in the system. Its moves are often market-oriented.

Lại sắp có một đợt hạ lãi suất tiền gửi đồng loạt? - 1 — Interest rates have decreased rapidly and strongly since April (Photo: Tien Tuan).

The trend of decreasing interest rates started in April, after the State Bank adjusted the operating interest rate four times in a row, including three times reducing the deposit interest rate ceiling. This development is contrary to the monetary tightening trend of the US Federal Reserve (Fed) and many other countries in the world.

Banks are also "over-capitalized" in the context of the economy's gloomy capital absorption capacity. The director of a bank branch in Bac Ninh said that this unit is very difficult when having excess capital. "We really want to find ways to push capital outside, reduce interest rates on all old and new lending channels," he said.

Currently, interest rates remain low and there is not much room for reduction when considering the correlation with inflation and exchange rate indicators. This person predicts that some banks may soon adjust their savings interest rates to a low level again, but not significantly, and then maintain them until the end of the year.

Mr. Huynh Hoang Phuong - Director of Research and Analysis of FIDT - a unit specializing in investment consulting and asset management - also predicted that there is not much room left to reduce deposit interest rates. He predicted that deposit interest rates will tend to move sideways from now until the end of the year.

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