Savings interest rates increase, after September 2nd holiday, where is the most profitable place to deposit money?

Banks increase short-term interest rates

According to a survey by Dan Tri reporters in the last week of August, many banks adjusted their savings interest rates up, from 0.1%/year to 0.9%/year. The banks adjusting deposit interest rates are all private banks, including VPBank, Techcombank, Sacombank, TPBank, SHB, ACB, HDBank, Eximbank...

Of which, VPBank increased interest rates by 0.5%/year for 1-month terms and 0.2%/year for terms of 3 months or more. ACB and SHB increased by 0.1%/year to 0.4%/year for all terms. Techcombank and TPBank increased by 0.2%/year to 0.4%/year for terms under 12 months...

HDBank even increased deposit interest rates for the second time this month, for terms of 1-6 months, by 0.3%/year to 0.4%/year for terms of 3-5 months and 12 months. Meanwhile, HDBank kept the interest rate for 12-month terms at 5.5%/year, and for 13-month terms at 5.7%/year.

Eximbank also increased interest rates for 1-month terms by 0.3 percentage points per year, and for 2-month terms by 0.2 percentage points per year.

Some mid-range banks such as DongABank, CBBank, Saigonbank, BaoVietBank… after a long period of keeping the interest rate unchanged also adjusted to increase interest rates. In particular, DongABank increased sharply by 0.9 percentage points/year for most terms.

In the previous July, according to statistics from MB Securities Company (MBS), a total of 16 banks adjusted their deposit interest rates with an increase from 0.1%/year to 0.7%/year.

The wave of increasing savings interest rates started to strengthen from the beginning of April this year (Photo: Manh Quan).

Some banks adjust interest rates down

In contrast to the recent interest rate hike, the financial market also recorded a few units adjusting savings interest rates down after previous increases, such as SeABank and BacABank.

In August, SeABank reduced its deposit interest rates by 0.25% per year for all terms. Previously, the bank had increased its highest interest rate to 6.2% per year, the market's leading rate.

ABBank also unexpectedly reduced savings interest rates at the beginning of the month, down 0.2% to 0.3% per year for most online deposit terms.

Eximbank has also just reduced its 12-month term deposit interest rate by 0.2 percentage points per year, down to 5.2% per year for online deposits.

Currently, ABBank is the bank with the highest interest rate in the system, at 6.2%/year for a 12-month term deposit. Some other banks such as BaoVietBank, BVBank, NCB, HDBank also pay an interest rate of 6%/year, but customers must deposit for a long term, from 15-24 months.

According to Dan Tri reporters' previous statistics from the second quarter 2024 financial reports of banks, in the first half of the year, the banks that attracted the most deposits last year were all in the big 4 (4 large banks with State capital). However, last August, this group did not adjust the savings interest rate up.

Agribank attracted the most deposits in the first half of the year with VND1.83 trillion, up 0.9% compared to the end of last year. BIDV ranked second with total deposits reaching VND1.81 trillion, up 6%. Following was VietinBank with a balance of VND1.47 trillion, up 4%. Vietcombank ranked fourth with VND1.37 trillion, down 1.5% compared to the end of last year.

Most experts believe that money will continue to flow into the banking system as interest rates continue to rise from now until the end of the year.

Economist Nguyen Tri Hieu said that interest rates will gradually increase for two reasons. Firstly, in the second half of the year, banks may be more aggressive in lending, so they will have to mobilize more capital, and banks will have to increase interest rates to attract capital.

On the other hand, the increase in deposit interest rates could also be due to an increase in bad debt. "Bad debt on the balance sheet at this time is about 4.5%, if we calculate bad debt off the balance sheet according to my estimate, it is about 6%. With high bad debt and high capital demand, deposit interest rates will have to increase, causing lending interest rates to increase as well," said Mr. Hieu.

According to this person, when the loan capital does not return to the system, banks must mobilize new capital to pay for old maturing deposits. Increasing deposit interest rates to attract new cash flow may be a necessary measure to ensure liquidity. However, this person noted that this pushes up borrowing costs because banks need to maintain a profit margin of about 3-4%.

"With this scenario, banks will increase deposit interest rates to increase deposits and loans. It is forecasted that lending interest rates will increase in the second half of 2024," said Mr. Nguyen Tri Hieu.

Source: https://dantri.com.vn/kinh-doanh/lai-suat-tiet-kiem-tang-sau-le-29-gui-tien-o-dau-loi-nhat-20240901224146546.htm