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Deposit interest rates plummet, people pour money into other investment channels



Commercial banks have reported a sharp fall in deposits as interest rates are now at a 10-year low and people seek other investment channels.

Deposit interest rates plummet, people pour money into other investment channels

Some commercial banks eased deposit interest rates slightly in early July. Sacombank cut interest rates by 0.2 percent for 1-36-month deposits, and VP Bank by 0.18-0.2 percent.

According to General Statistics Office (GSO), the deposit interest rates were stable in H1 2021 after decreasing sharply in 2020.

The interest rates are 0.1-0.2 percent per annum for demand and less-than-1-month deposits; 2.85-4 percent for 1-month- and less-than-3-month deposits; 3-4 percent for 3-month, 4-6.25 percent for 6-month, 4-6.4 percent for 9-month and 4.7-6.8 percent for 12-month deposits. The highest rates of 5-7 percent are applied to 13-36 month deposits.

Statistics show that the deposit interest rates decreased by 1.5-2.5 percent over the last year. Many banks now pay 3.1-3.3 percent per annum only for 1-month deposit, the lowedt in the last 10 years.

The Vietnam Association of Financial Investors (VAFI) has proposed gradual reduction of Vietnam dong deposit interest rates to zero percent. It says the interest rate is being used in many developed economies, while minus interest rates (banks collect fee for deposits) is being applied in some other countries.

The policy keeps the lending interest rates low, at 2-5 percent per annum, helping to stimulate the development of the business system and stock market and ensure social welfare for low income earners.

However, the proposal has not been advocated by experts, who believe that it is not feasible to apply the zero percent interest rate policy now.

They warn that such low interest rates would prompt depositors to draw deposits from banks and pour money into other investment channels. This will cause adverse effects to the economy.

Commercial banks have reported a sharp fall in deposits as interest rates are now at a 10-year low and people seek other investment channels.

The banking system may be put in danger of lacking liquidity and the economy would lack capital for production, business and consumption. In this case, clients will have to compete with each other to get bank loans, which will push the lending interest rates up. Even if lending interest rates don’t increase, unofficial costs that businesses have to pay to get loans will increase.

Analysts said that banks cannot slash deposit interest rates any further. If they do, money will leave the banking system and head for other investment channels, including securities, real estate, gold, cryptocurrency and usury.

Meanwhile, VN Direct predicted that the deposit interest rate would increase by 0.25-0.3 percent in H2 because of high credit demand, higher pressure on the inflation. In principle, banks need to maintain attractive interest rates to attract more deposits as they have to compete with other investment channels.

According to Vietcombank Securities, the deposit interest rates decreased by 0.3 percent in H1 and have been stable at low levels. It said that the interest rates would go flat in H2 or increase slightly by 0.1-0.2 percent.

As for lending interest rates, they are expected to decrease further, but they will not be the same throughout the banking system. State Bank of Vietnam recently asked banks to slash interest rates in July to help businesses overcome difficulties caused by Covid-19.

Deposits drop

According to the State Bank of Vietnam (SBV), while some banks attracted big deposits with a growth rate of 10 percent in H1, others reported a decrease in deposits, though their lending still increased. ABBank, for example, reported a decrease of 7.4 percent, SeA Bank 4.7 percent, NCB 4 percent, Saigonbank 0.3 percent and PG Bank 0.2 percent.

While the mobilized capital growth rate from the public was the lowest in the last nine years, the capital mobilized from economic institutions was higher.

As of the end of May, the deposits from economic institutions had reached VND5.03 quadrillion, up by 3.26 percent over late 2020, a 5-year record high. Meanwhile, the deposits from the public had reached VND5.27 quadrillion, up by 2.6 percent.

This was the first time the deposit growth rate from economic institution exceeded the growth rate from the public in January-May.

Prior to that, SBV reported that deposits by economic institutions at VND5.26 quadrillion were, in the first four months of the year, up by 2.05 percent, the lowest growth rate compared with the same period of previous years. The figure was lower than the growth rate of 2.34 percent in deposits from the public.

But the situation changed after May with deposits from businesses increasing by VND59.121 trillion, which accounted for four-fifths of the total money additionally deposited at the banking system.

The sharp rise in businesses’ deposits was attributed to the impact of the Covid-19 pandemic. The fear of risks prompted businesses to deposit money at banks.

Meanwhile, deposits from the public are going the opposite way with the growth rate having slowed down since 2016.

The growth rates of deposits from the public decreased from 11.04 percent in 2016 to 9.39 percent in 2017, 7.5 percent in 2018, 6.84 percent in 2019, and 4 percent in 2020.

Low deposit interest rates were an important cause for this. 

Tuan Dung



Ministry investigates evasion of trade remedies for cane sugar



Bags of sugar displayed for sale at a supermarket in Bangkok. — VNA/ Photo Ngọc Quang

HÀ NỘI — The Ministry of Industry and Trade (MoIT) on Tuesday issued a decision to investigate the evasion of trade remedies for cane sugar products originating from Thailand after considering requests from domestic sugar producers.

The ministry said it has received the petition of the Vietnam Sugarcane and Sugar Association (VSSA) and domestic cane sugar refineries, which submitted evidence that Thai cane sugar products subject to anti-dumping and anti-subsidy taxes have entered the Vietnamese market through five ASEAN countries of Laos, Cambodia, Indonesia, Malaysia and Myanmar.

The MoIT officially imposed anti-dumping and anti-subsidy duties on a number of sugar cane products originating from Thailand on June 15, 2021.

Data of local customs agencies shows that the volume of sugar imported from the five above-mentioned ASEAN countries had increased sharply to 527,200 tonnes from 107,600 tonnes after Viet Nam initiated an anti-dumping and anti-subsidy investigation into sugar from Thailand from October 2020 to June 2021.

Meanwhile, the import volume from Thailand has decreased by nearly 38 per cent, from 955,500 tonnes to 595,000 tonnes in the period.

The MoIT has actively coordinated with the VSSA to monitor the import of cane sugar products and actively consulted and assisted the VSSA, as well as the domestic cane sugar industry, in collecting information and data and making a petition to request an investigation into this behaviour. —


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Santorini masterpiece on the most beautiful avenue of Vung Tau downtown

Léman Cap Residence has taken inspiration from paradise island Santorini in Greece to bring the Mediterranean breath to Ha Long street, the most beautiful avenue in the coastal city of Vung Tau.



Project inspired by Santorini Paradise, a destination of Hollywood stars

Santorini is a mainstay on the list of Top 10 paradise islands by the famous American Travel + Leisure Magazine. The island has also been voted as one of the Top 20 most expensive vacation destinations in the world with five-star luxury resorts. It is apparent why many famous Hollywood stars choose Santorini for vacationing.

Rumor has it that “Mrs. Smith” Angelina Jolie once bought a villa right on Santorini island for annual vacations. If you ever get lost here, you will most likely come across Tom Hanks and his wife, Shakira and Pique, or basketball player Michael Jordan. Music star Justin Bieber has also been to Santorini to enjoy the delicious food and wine. The island’s famous specialty is made from grapes grown on the volcanic mountains.

Santorini has always been an irresistible magnet with its characteristic Cycladic architecture, an integral part of the Mediterranean culture. Cycladic architecture is famous for its uniqueness and charm, providing the islands with minimal aesthetics but with a daring style. The most prominent characteristic of this architectural style, are the white washed cube houses built next to and on top of one another.

Léman Cap Residence – a diamond at the most expensive luxury boulevard in the coastal city of Vung Tau
Léman Cap Residence – a diamond at the most expensive luxury boulevard in the coastal city of Vung Tau

Visit Léman Cap Residence – a diamond at the most expensive luxury boulevard in the coastal city of Vung Tau

Visitors looking for a taste of Greece need not go that far anymore. Léman Cap Residence now captures the essence of the paradise island Santorini in its design and architecture. Travel lovers can now visit the made in Vietnam Santorini to admire the beauty of the island on Ha Long Street in Vung Tau.

Ha Long is the most bustling street in Vung Tau with well-developed transport infrastructure surrounded by thousands of five-star entertainment services. Along the avenue lie many famous tourist attractions such as Front Beach, Pineapple Beach, Nghinh Phong Cape, Bai Dau and Bai Sau tourist areas, which welcome millions of tourists every year.

Just a few minutes walk from Léman Cap Residence apartment to Ha Long Street, you can easily access a variety of branded shophouses, specialty restaurants, entertainment services, temples and churches, which are the cultural symbols of Vung Tau. Being located on the central route of the city, visitors can reach other areas quickly and easily via Long Thanh International Airport, Ring Road 4 connecting Vung Tau with the western region, as well as many other highways.

The masterpiece Léman Cap Residence fascinates with its unique Santorini architecture with characteristic white and blue colours. The project offers remarkable and unique ocean views while leaning against the green hills. A forest in the middle of the busy street, Léman Cap Residence is a separate resort complex with green nature, blooming flowers and chirping birds all year round.

Léman Cap Residence is located in Ha Long street - the most beautiful central avenue in the coastal city of Vung Tau
Léman Cap Residence is located in Ha Long street – the most beautiful central avenue in the coastal city of Vung Tau

Léman Cap Residence will leave impression on people with its beauty. Léman Cap Residence is a unique Santorini masterpiece with the immense blue sea in front and the fresh green mountains behind. Meanwhile, the surrounding areas are bustling and colourful entertainment complex. 

Léman Cap Residence: Masterpiece Santorini – A diamond on the most beautiful central avenue in the coastal city of Vung Tau

Hotline: 0918887920




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Vietnam aims to become world’s farm produce granary



The national digital transformation program says Vietnam will develop hi-technology agriculture with a focus on smart and precise agriculture, while increasing the proportion of digital agriculture in the economy.

Vietnam aims to become world’s farm produce granary

Opening the forum on digital transformation in Vietnam’s agriculture, Truong Gia Binh, Chair of the Vietnam Digital Agriculture Association (VIDA), stressed that it’s necessary to conduct strong digital transformation in e-commerce, e-payment, logistics and agriculture operations. If Vietnam can successfully do these, it will become a country with great competitive potential.

“Our land is situated in the area which doesn’t need heating in winter. It allows us to harvest many crops all year round. We still develop agriculture with 2/3 of population in rural areas. Vietnam’s IT is developing rapidly. All these factors will turn Vietnam into a farm produce granary of the world,” Binh said.

Deputy Minister of Information and Communications Nguyen Huy Dung said the important role of agriculture in maintaining the survival of the society has been confirmed in the pandemic. Agricultural development is the foundation for socio-economic development.

Digital transformation in agriculture needs to be implemented on the basis of data. It’s necessary to have big data about land, crops, livestock and aquaculture; apply digital technology to automate production and business processes, and supervise origin and product supply chains, ensuring transparency, accuracy, safety and food hygiene; and deploy the initiative ‘every farmer is a businessperson and every cooperative is a business utilizing digital technology’.

Also, it’s necessary to conduct digital transformation in management to have reasonable and timely policies for agriculture development, such as market forecasting and planning management.

According to Dung, the goal is that farmers make products at the lowest possible cost and sell products at the highest possible price. Digital transformation is one of the keys to reach that goal.

Minister of Agriculture Le Minh Hoan said Vietnam is facing three challenges, including climate change, market fluctuations and changes in consumption trends in the world.

However, challenges could turn into opportunities. Vietnam is shifting from the period of agricultural production into the period of an agricultural economy based on technology and digital transformation.

Prof Tran Dang Xuan from Hiroshima University said that 70 percent of Vietnam’s farm produce is from small-scale farming households. These households should be put at the center. Of smart agriculture production areas, Mekong Delta should be put at the center. Farmers should learn how to make online transactions. The Government should create policies to encourage farmers to develop digital agriculture.

The scholar said that Vietnam should learn from Japan when developing digital agriculture by sending students to Japan every year for internships. 

Tam An


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