A bank teller counts money at a transaction office in Hanoi. (Photo: VNA)

Specifically, Techcombank has increased deposit interest rates for all terms. According to Techcombank’s new interest rate list, depositors with a term of one to two months will receive an interest rate of 2.55% per year, up 0.3 percentage point per year compared to last month.

Similarly, the bank’s deposit interest rate for terms from three to five months also increased to 2.95% per year, up 0.4 percentage point per year.

The rates for longer term deposits of six to 11 months and 12 to 36 months at Techcombank have also increased by 0.3 and 0.1 percentage point per year to 3.85% and 4.65% per year, respectively.

For deposits worth more than 1 billion VND, Techcombank applies a higher interest rate of 0.1-0.2 percentage point compared to the above levels, depending on each term and deposit amount.

Similarly at VIB, deposit interest rates for terms from two to five months have raised by 0.2 percentage point per year to range from 2.8 to 3% per year. The bank’s interest rates for 6-11 month deposits have also increased by 0.1 percentage point per year to 4.1% per year.

Not only Techcombank and VIB, Bac A Bank is also in the same trend with a rate hike of 0.15-0.25 percentage point per year for six to 18 month deposits. Currently, Bac A Bank applies interest rate of 4.5% per year for six-month deposits, 4.6% per year for nine-month deposits, 5.1% per year for 12-month deposits and 5.5% per year for 18-month deposits.

Previously, a number of other banks participated in the race to increase deposit interest rates such as BIDV, VietinBank, BVBank, TPBank and Sacombank.

The deposit interest rate hike is not beyond the forecast of experts, especially in the context that the savings amount at the banking system have declined for the first time after 25 consecutive month increase.

According to the latest data from the State Bank of Vietnam, by the end of January 2024, deposits of individual customers reached nearly 6.5 quadrillion VND, down 0.53% compared to the end of last year, while deposits of corporate customers were also declined by 2.41% to more than 6.67 quadrillion VND.

Data from the General Statistics Office also shows that bank deposits as of March 25 this year decreased by 0.76% compared to the beginning of the year, while it increased by nearly 1.2% at the same period last year.

Dr. Nguyen Duc Do, Deputy Director of the Academy of Finance’s Institute of Financial Economics, said the increase in deposit interest rates may come from the recovery of credit demand. The SBV allocated all credit quota for commercial banks right from the beginning of the year, instead of only a part as previous years, so banks must raise more deposits to readily meet the capital needs of business, production and consumption.

However, experts believe that deposit interest rates in the coming time will hardly increase sharply because the Government and SBV's orientation is to stabilise interest rates and even strive to reduce the rates to support the economic growth./.