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Bank deposits grow despite lower interest rates

Individual bank deposits grew 9.7% in the first 8 months of this year despite decreased interest rates, as the unattractive stock and real estate markets left few investment options.

People deposited VND6,430 trillion (US$267.9 billion) in banks between January and August, according to data from the central bank.

Bank deposits grow, lower interest rates, total deposits, few investment options, popular interest rate

An employee counts Vietnamese banknotes at a bank in Hanoi.

The central lender reported that individuals bank deposits totaled VND43.7 trillion in August even though a dozen banks paying the highest interest were still only offering around 7% or more for deposits under VND1 billion.

Meanwhile, interest rates at the country’s 20 other remaining banks were only up to about 6%-7% per year, usually for one-year terms.

Nguyen Quoc Hung, chairman of the Vietnam Banks Association (VNBA) said at a meeting with bank representatives last December that the popular interest rate at the time was at 9-10% annually for a 12-month term, with some banks offering up to 11.5%.

Organizations such as companies and agencies deposited VND103 trillion in the banking system in August, bringing total deposits in the first eight months to VND6,000 trillion, up by 1% against the end of last year.

In previous years, low interest rates during the Covid-19 period had channeled cash flows into other investment avenues such as stocks and real estate.

However, bankers do not expect such a trend this time as the stock and real estate markets are now gloomy.

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Source: VnExpress

Bank deposits grow, lower interest rates, total deposits, few investment options, popular interest rate
 
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