Record low deposit interest rates, where will the money flow to at the end of the year?

These are positive signs of the current economic recovery.

Positive signs for the economy

According to the State Bank's report, at the end of the third quarter, the overall picture of the entire banking industry was still not bright as credit growth remained low compared to the same period last year.

By the end of September, credit had only increased by 5.91%. However, in November, 16 banks had lowered their deposit interest rates to a record low, with the 1-2 month term dropping to 2.6% per year.

Faced with the question of where the money will flow to at the end of the year when bank interest rates have dropped to a record low, experts say that savings will shift to other investment channels such as real estate, stocks, gold... and especially will be chosen to invest in production and business, serving people's consumption needs at the end of the year.

Interest rates have dropped sharply, a large amount of money will be poured into production and business to serve consumer needs at the end of the year (Photo: Tuyen Quang Newspaper)

Economist Dr. Nguyen Tri Hieu said that from now until the end of the year, a large amount of bank deposits will mature. When interest rates decrease, many investors will no longer be interested in saving in banks.

Instead, we will focus on investment channels that bring higher profits than savings, including investing in buying land that is decreasing sharply or investing in buying apartments for rent, for living or another cash flow will be poured into the production and business sector because at the end of the year, people's consumption demand will increase.

“Thus, there will certainly be a cash flow into the real estate market, a cash flow into investment for production and business from now until the end of the year, when bank interest rates are falling sharply as they are now. This is a quite positive signal, helping the economy to gradually recover,” said Dr. Nguyen Tri Hieu.

Dr. Le Duy Binh - CEO of Economica Vietnam said that the interest rates of banks are competing to decrease to confirm that people should not expect to save money. Accordingly, capital flows will shift to other areas, supporting the economy.

Dr. Le Duy Binh said that recently, the Government, the Prime Minister, and the State Bank of Vietnam have directed banks to reduce interest rates on deposits and loans, thereby supporting businesses and people with capital to invest in production and business.

“The fact that banks are lowering interest rates shows that they are on the right track to stimulate capital flows into the market, serving production and business needs, and promoting the development of goods at the end of the year. This is a positive sign if investors and businesses seize the opportunity to borrow capital to invest in production,” Mr. Binh analyzed.

Meanwhile, Mr. Dang Tran Phuc - Chairman of the Board of Directors of AZfin Vietnam Joint Stock Company said that when savings deposits decrease as deeply as they are now, it is likely that cash flow will also be allocated to commodity investment channels.

"It is highly likely that the amount of money deposited in the savings channel has not been completely withdrawn. In other words, this is one of the channels that accounts for a high proportion of cash flow, an amount that is about to mature. At the present stage, the level of concentration may not be much because there is dispersion by the commodity investment channel. Because the world political tensions are creating a new wave for the price of oil and gold. Then I think that there is a high possibility that cash flow will also be allocated to this channel," Mr. Phuc commented.

Experts also said that in the current context, investors must diversify investment channels, shifting cash flow from low-profit to high-profit sectors is inevitable.

However, each investor has a different "taste". Especially in the current volatile context, despite low interest rates, savings channels are still one of the channels chosen by many investors because of their stability.

In addition, experts also recommend that investors need to equip themselves with certain financial and economic knowledge, ensure a balance between profitability and risk of each investment channel, choose the right investment channel, right expertise, ability and strictly follow the strategy to limit risks when investing.

Banks deeply reduce deposit interest rates

Most recently, in the Big4 group, Vietcombank has just adjusted its deposit interest rate, with a term of 1-2 months reduced to a record low of 2.6%/year.

In Vietcombank's online deposit interest rate table, the interest rate for terms from 1 to 11 months decreased by 0.2%/year; terms from 12 to 24 months decreased by 0.1%/year. Terms from 3 to 5 months decreased by 2.9%/year; terms from 6 to 11 months decreased by 0.2%/year, to 3.9%/year. The highest deposit interest rate at Vietcombank is for terms from 12 to 24 months, at 5%/year.

Currently, Vietcombank has the lowest interest rate in the Big4 group and also the lowest in the market.

Deposit interest rates have dropped sharply (Photo: Baochinhphu.vn).

PVCombank has also sharply reduced interest rates for all terms. Specifically, the 1-5 month term has been reduced by 0.3 percentage points to 3.65%/year. The 6-9 month term has also been sharply reduced by 0.5 percentage points to 5.6%/year.

Interest rates for the remaining terms were also adjusted down by 0.5 percentage points compared to before. The 12-month term also lost the mark of over 6% to fall back to 5.6%/year. Interest rates for deposit terms from 18-36 months decreased from 6.5% to 6%/year.

VietBank reduced interest rates by 0.2 percentage points for terms of 15-36 months. Deposit interest rates for these terms have all dropped to 6.2%/year. Interest rates for terms under 15 months remain unchanged and are all below 6% after the adjustment on November 7.

Thus, since the beginning of November until now, 16 banks have reduced deposit interest rates: ACB, Bac A Bank, Bao Viet Bank, Dong A Bank, Kien Long Bank, Nam A Bank, NCB, Techcombank, PG Bank, PVCombank, SHB, Sacombank, VIB, VietBank, VPBank and Vietcombank.

PHAM DUY

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