Banks compete to lower interest rates, two Big 4 have record reductions

Recently, the Vietnam Bank for Agriculture and Rural Development ( Agribank ) announced a new interest rate schedule with a decrease of 0.2 - 0.3 percentage points at many terms.

In more detail, for 1-month and 2-month terms, Agribank maintains the mobilization interest rate at 3%/year. For terms from 3 months to 5 months, customers will only receive an interest rate of 3.5%/year, corresponding to a decrease of 0.3 percentage points compared to the most recent adjustment.

For terms from 6 months to 9 months, the savings interest rate has been lowered to 4.5%/year, down 0.2 percentage points compared to the old interest rate schedule. For terms of 12 months, Agribank has reduced the mobilization interest rate from 5.8%/year to 5.5%/year, equivalent to an adjustment of 0.3 percentage points.

For long term from 13 months to 24 months, Agribank keeps deposit interest rate at 5.5%/year.

Along with Agribank, Joint Stock Commercial Bank for Foreign Trade of Vietnam ( Vietcombank ) also changed its interest rate schedule on September 14.

Accordingly, the online interest rate for 3-month to 5-month terms decreased by 0.5 percentage points to 3.5%/year. The 6-month to 11-month term decreased by 0.2 percentage points to only 4.5%/year. The long-term interest rate for 12 months or more decreased by 0.3 percentage points to 5.5%/year.

As for the form of savings at the counter, Vietcombank's highest interest rate is currently only 5.5%/year, applied for terms of 12 months or more. This interest rate has decreased by 0.3 percentage points compared to before. The interest rate for 1-month term remains at 3%/year.

With the above adjustment, both Agribank and Vietcombank have reduced 12-month deposit interest rates to 5.5%/year - equal to the historical low recorded during the Covid-19 period.

On the same day, PVCombank reduced interest rates by 0.3 percentage points for terms from 6 months to 11 months to 6.4%/year, reduced interest rates by 0.2 percentage points for terms from 12 months to 15 months to 6.5%/year, and terms from 18 months to 36 months reduced by 0.1 percentage points to 6.8%/year.

Similarly, Bao Viet Bank reduced the interest rate for deposits with terms of 6 months to 36 months by 0.2 percentage points. According to the online interest rate table, the interest rate for a 6-month term is 6.1%/year, for a 7-8-month term is 6.15%/year, for a 9-month term is 6.3%/year, for a 10-11-month term is 6.2%/year, and for a 12-36-month term is 6.5%/year.

In the strategic report, VNDirect Securities stated that from now until the end of the year, lending interest rates may decrease more sharply due to the decrease in capital costs of commercial banks thanks to the impact of the State Bank's operating interest rate cuts in the first 6 months of 2023 and the State Bank issuing Circular 02 allowing the extension of bad debt provisioning.

The analysis team expects lending rates to fall by another 100-150 basis points in the coming months and believes that lower lending rates will be a factor promoting the recovery of private consumption and investment.

In the updated report on the industry outlook for the second half of 2023, Dragon Capital Securities (VDSC) also forecasted that the State Bank will cut the basic interest rate by 50 basis points once again, at the earliest in the third quarter of 2023. The operating interest rate level will return to the low level of the pre-COVID-19 period .

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