Interest rates drop sharply, savings still flow into banks at record highs

According to data just announced by the State Bank, the amount of money people deposited in the banking system in September reached 15,935 billion VND.

In the first 9 months of this year, people's deposits in the banking system reached nearly 6.45 million billion VND, an increase of about 9.95% compared to the beginning of the year, the highest level ever.

The amount of deposits of economic organizations into the banking system also increased significantly with an additional VND217,353 billion in September.

Accumulated in the first 9 months of this year, deposits of economic organizations reached 6.23 million billion VND, an increase of more than 4.65% compared to the end of last year.

In general, deposits of both residents and economic organizations in the banking system by the end of the third quarter of 2023 reached 12.68 million billion VND, an increase of 7.3% over the beginning of the year.

Also according to the State Bank, total means of payment (including valuable papers) held by banks by the end of September reached more than 15 quadrillion VND, an increase of more than 5.6%.

dsc 0760 78.jpg — Bank deposits increased sharply. (Photo: Hoang Ha)

The amount of money deposited into the banking system has continuously set new records recently, mainly because other investment channels such as bonds and real estate have almost frozen, while the stock market is no longer as attractive as in the 2021-2022 period.

Meanwhile, due to weak purchasing power in both domestic and global markets, businesses do not dare to boldly invest in production, so idle money is also deposited in banks despite the continuous sharp decline in deposit interest rates since March.

At present, the interest rates for 6-12 month term deposits have been brought down to below 6%/year by banks. Some banks have even brought the interest rates for these terms down to below 5%/year.

Since the beginning of the year, the average deposit interest rate has decreased by about 2%. Even the deposit interest rate at the group of state-owned commercial banks with a term of 12 months or more is now only 5-5.5%/year.

Since the beginning of the year, the State Bank has continuously adjusted down the operating interest rates four times with a reduction of 0.5-2%/year.

To date, credit institutions have committed to a total interest reduction of about VND 22,000 billion.

Source