CATEGORIES

© Copyright 2004; Hanoitimes - Economic and Urban Newspaper;

The tribune of Hanoi People’s Committee

Publication Permit: 29/GP-CBC

Editor - in - Chief: Nguyen Thanh Loi

Managing Editor: Ta Thu Giang

Email : thugiang@hanoitimes.vn

Head Office: 21 Huynh Thuc Khang Street, Dong Da District, Hanoi

Branch Office: 221 Tran Phu Street, Ha Dong District, Hanoi

WORDS ON THE STREET 70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Banking & Finance
Deposit growth rate slows as credit continues to rise
17:19, 2015/04/12
The deposit growth rate is currently slower than that of credit growth; however, savings in banks are still considered a good choice due to low inflation.
Statistics from the General Statistics Office showed that as of March 20, deposits at credit institutions rose 0.94 percent from December 2014, while credit increased 1.25 percent.
Nguyen Hoang Minh, Deputy Director of the State Bank of Vietnam (SBV)'s Ho Chi Minh City branch, said deposits in the city had increased at a modest rate of 0.4 percent, while credit rose by 2.3 percent.
Experts attributed the slowdown mainly to a recent significant reduction in deposit interest rates.
According to the SBV, the VND deposit rates have reduced significantly to commonly 0.8-1 percent per year for on-demand and below 1 month terms, 4.5-5.4 percent per year for 1-6 month terms, 5.4-6.5 percent per year for 6-12 month terms; and 6.4-7.2 percent per year for 12 month plus terms.
Meanwhile, the residential real estate market is warming up, so many depositors have withdrawn their savings to buy houses.
 
Illustrative image
Illustrative image
Nguyen Thanh Nhung, VietBank General Director, said that although savings at banks had increased in the first quarter, a number of individual customers had withdrawn their deposits and even borrowed money from banks to purchase a house as the lending rate for home mortgages had fallen to reasonable rates.
A representative from a small bank, which declined to be named, admitted that although liquidity in the banking system was good, banks still had to compete to increase their deposit market shares when deposit interest rates were low and were kept at the same rate at both large and small banks.
Besides interest rates, the representative said, banks also had to utilise more promotions to lure depositors.
Despite the decline in deposit sources, experts agreed that due to low inflation, the current deposit rates still ensure positive effective rates, so savings are still a good choice for investment.
Tran Du Lich, member of the Monetary and Financial Policies Advisory Council, said the rate cap of 5.5 percent per year for term deposits of under six months still ensure positive effective rates. Depositors could even get higher rates if they chose longer terms, he said.
However, Lich said, the flow of savings to other channels was also a good sign as it proved the potential for an economic rebound.
Comments
Other news
17:51, 2025/01/07
Vietnam prioritizes agriculture and renewable energy for access to green loans
The move is part of the government’s effort to accelerate economic restructuring and build resilience to climate change while protecting the environment.
16:49, 2025/01/06
Vietnam GDP expands by 7.09% in 2024
The 2024 growth rate is considered positive amidst global uncertainties and domestic challenges such as natural disasters.
14:39, 2025/01/04
Vietnam stock market set to accelerate in 2025: Experts
Stable macroeconomic fundamentals, ongoing institutional reforms, and favorable monetary policies will be positive for corporate earnings.
16:31, 2025/01/02
Vietnam stock market aims for emerging status by 2025: Finance minister
By the end of 2024, the benchmark VN-Index reached 1,266.78 points, up 12.11% from 2023.
15:33, 2025/01/02
Vietnam set to extend VAT cut for six months
This measure is expected to accelerate the recovery of production and business activities, which will ultimately benefit the state budget and the economy as a whole.
21:29, 2024/12/31
Vietnam’s credit growth projected to expand by 16% in 2025
Growth must put operational safety first, and channel credit to productive business sectors, priority areas, and growth-driving industries.