Personal deposits in Vietnam’s banking system reached VND4,720 trillion (US$203.73 billion) in the first six months of 2019, up 7.96% against the beginning of the year, according to the State Bank of Vietnam (SBV).
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Notably, deposits from economic organizations from January to April were at lower rates compared to the end of 2018. The deposit amount in the first two months of 2019 was VND100 trillion (US$4.31 billion) lower than that at the end of 2018.
However, such figure picked up strongly with an increase of VND140 trillion (US$6 billion) in May to reach VND3,420 trillion (US$147.6 billion), representing an increase of VND85 trillion (US$3.66 billion) compared to the end of 2018. The deposits then continued to increase by VND83 trillion (US$3.58 billion) in June.
Contrary to the strong fluctuation of deposits from economic organizations, individual deposits increased steadily in the January – June period.
The gradual increase of personal deposits from the people is driven by higher interest rates offered by commercial banks to fulfill their respective credit growth targets, particularly in the context of fierce competition with other investment channels such as bonds or CDs, as well as the reduction of the rate of short-term capital for mid- and long-term lending from the current 40% to 30%.
Recently, the highest interest rate in the market has spurred to 10% per year, indicating a trend where lift interest rates to raise mid- and long-term capital. Specifically, Viet Capital Bank announced the issuance of certificate of deposits for organizations and individual customers with interest rate of 9.5% - 10.2% per annum, applicable to the maturity period from 24 – 60 months.
The highest interest in the market previously belong to the certificate of deposits for 61-month period of Vietnam International Bank (VIB) and 24-month period of Viet A Bank.
