Trang Chủ
Although interest rates decrease, people still deposit money in banks
According to the updated interest rate of 34 commercial banks across the system on September 12, only 1 bank is applying the highest interest rate for terms from 1 month to 9 months, with deposits of 12 months or more. There is only 1 bank left applying an interest rate of 7%/year for 12-month term deposits. Savings interest rates have dropped quite deeply. The interest rate difference between terms is not significant.
At some banks, interest rates on long-term deposits of 9 months or more are lower than 6-month deposits. Mobilization interest rates are relatively uniform throughout the system, interest rate differences between banks have narrowed significantly, a signal that system liquidity is stable. Notably, the group of 4 state-owned commercial banks (Agribank, BIDV, Vietcombank, Vietinbank) are no longer the banks with the lowest interest rates in the market for terms of 12 months or more.
Specifically, the lowest 1-month term deposit interest rate is 3%/year, applied at 4 state-owned commercial banks. For the 3-month term, there are 9 banks applying the highest interest rates in the system: Bac A, BaoViet Bank, GPBank, NCB, Oceanbank, PGBank, SCB and VIB. The highest 6-month savings interest rate is 6.55%/year, applied at Bac A Bank. Followed closely by the interest rate of 6.5%/year, applied by BaoViet and Publicbank. The lowest 6-month interest rate is 4.7%/year, applied simultaneously at 4 banks: Agribank, BIDV, Vietcombank and Vietinbank. The 9-month term does not have a big difference compared to the 6-month term. Most banks only adjusted the increase very slightly, only 0.1% - 0.2% for 9-month term (compared to 6-month term).
The highest 12-month savings interest rate is 7%/year, at Publicbank. Following closely are BaoViet Bank and CBBank, with 6.9%/year and 6.8%/year. Notably, at the 12-month term, the interest rates at Agribank, BIDV, Vietcombank, and Vietinbank (5.8%/year) are not the lowest. Private commercial banks have sharply reduced 12-month savings interest rates. Accordingly, ABBank only 5%/year; ACB 5.3%/year; SeABank 5.5%/year; Techcombank 5.75%/year.The highest 18-month and 24-month savings interest rates are at 6.9%/year; Applicable at BaoViet Bank, CBBank, Dong A Bank, OCB.
Regarding operating interest rates, from the beginning of the year until now, implementing the policy of the National Assembly, the Government, and the Prime Minister to reduce lending interest rates to remove difficulties for the economy, businesses and people, the State Bank of Vietnam (SBV) has adjusted to reduce interest rates 4 times with a reduction of 0.5-2.0%/year. Continuously adjusting and reducing operating interest rates is a flexible solution, consistent with current market conditions to support the process of economic growth recovery according to the policies of the National Assembly and the Government, thereby continue to reduce market lending interest rates, increase access to capital for businesses and people, and contribute to promoting economic growth.
According to the SBV, the average deposit and lending interest rates of new transactions tend to decrease. By August 2023, the average deposit interest rate in VND of domestic commercial banks will be 0.2%/year for demand deposits and with terms of less than 1 month; 3.9-4.4%/year for deposits with terms from 1 month to less than 6 months; 7.0-8.1%/year for deposits with terms from 6 months to 12 months; 7.4-8.5%/year for deposits with terms from over 12 months to 24 months and 7.2-8.4%/year for terms over 24 months. By September 20, 2023, the average deposit and lending interest rates of new transactions of commercial banks are at 4.5%/year and 8.2%/year, down more than 1% compared to the previous year. end of 2022.
By the end of august, capital mobilization reached 11,756,015 billion VND, an increase of 3.87% compared to the end of 2021 (the same period in 2021 increased by 4.39%). In recent months, residents' deposit balances have continuously increased (June 2023 was 6,382,886 billion VND, an increase of 8.82% compared to the end of 2022; May 2023 was 6,347,545 billion VND; April 2023 is 6,332,843 billion VND).
According to experts, the continuously increasing amount of deposits in bank shows that people are not ready to invest in other segments. Corporate bonds, stocks, and real estate are stagnating, so they only focus on savings deposits to ensure capital, waiting for business opportunities when the economy improves. Furthermore, when depositing money in a bank, customers will both enjoy interest rates and deposit insurance, and their legal rights and interests are always guaranteed.
The “shield” protects depositors
When depositing money, people need to be aware of the deposit insurance policy in Vietnam, that credit institutions are allowed to receive deposits according to regulations have to participate in deposit insurance. From there, people can avoid the risk of losing money by depositing money in unofficial channels online or being lured by scammers with high interest rates. In particular, when depositing savings online, people need to be aware of security skills, account information security, e-banking login information, and avoid being scammed into accessing fake banking websites. or having your login password revealed by clicking on strange links...
In Vietnam, there is only one deposit insurer, namely the Deposit Insurance of Vietnam (DIV). According to Article 2, Decision No.1394/QD-TTg issued on August 13, 2013 of the Prime Minister stipulates the functions of DIV: “DIV is a state-owned financial institution that operates not for profit, to protect the legitimate rights and interests of depositors, implement deposit insurance policies, and contribute to maintaining the stability of the credit instituition system, ensure the safe and healthy development of banking activities”.
For depositors, the activities of DIV also contribute to strengthening public trust in the system of credit institutions, protecting the legitimate rights and interests of depositors. For the credit institutions system, deposit insurance activities create favorable conditions for the credit institutions system to develop healthily, safely and mobilize deposits for develop investment, thereby creating conditions to promote sustainable development of the country's economy.
DIV protects the legitimate rights and interests of insured deposit through its professional activities, thereby contribute to limiting risks, help insured organizations more safely and effectively, ensuring safety of deposits of depositors. The professional activities of DIV directly related to protecting the legal rights of depositors include: (i) DIV monitors, examine and supervises insured institutions in complying with the provisions of law on deposit insurance, and recommends to the State Bank of Vietnam (SBV) of violations; (ii) DIV synthesizes, analyzes and processes information of insured institutions to detect and propose to the SBV to promptly resolve violations of regulations on safety of banking operations and risks causing insecurity in the banking system; (iii) DIV participates in the special control process for insured institutions according to regulations of the SBV; participate in management and liquidation of assets of insured institutions according to Government regulations; special loans to specially controlled credit institutions to support liquidity, special loans according to regulations of the SBV and special loans according to approved credit institution recovery plans, purchase of long-term bonds of credit institutions to support support; (iv) When the insured institutions falls into the circumstance of insolvency or bankruptcy, the DIV will reimburse the insurance money to the insured person in accordance with the provisions of law; (v) improve the communication of deposit insurance policies to enhance public trust, contributing to ensuring the safety of the system of credit institutions.
According to Article 6 of the Law on deposit insurance and Article 4 of Decree No.68/2013/ND-CP dated June 28, 2013 of the Government, insured institutions are credit institutions and foreign bank branches that are allowed to receive deposits from individuals, including commercial banks, cooperative banks, PCFs, and foreign bank branches established and operating under the provisions of the Law on credit istitutions; microfinance institutions must participate in deposit insurance for individual deposits, including voluntary deposits of microfinance customers, except for mandatory savings deposits according to regulations of microfinance institutions; policy banks do not have to participate in deposit insurance.When depositing money at the above insured institutions, depositors' legal rights and interests are always guaranteed.
According to Article 15, Law on deposit insurance, "insured institutions must publicly display a copy of the certificates of participation in deposit insurance at all transaction points that receive deposits". The copy of the certificates of participation in deposit insurance are copies issued by DIV from the original.
Thus, depositors can identify whether a credit institution has participated in deposit insurance by observing whether the credit institution's transaction point has a copy of the certificates of participation in deposit insurance posted or not. In addition, depositors can visit the website of the deposit insurance organization (www.div.gov.vn) to learn more information about insured institutions.
Depositors has the rights and obligations to have their deposits insured at insured institutions according to regulations; receive insurance money in full and on time; require insured institutions and deposit insurance organizations to provide complete and accurate information and deposit insurance regime; complain, denounce and sue agencies, organizations and individuals related to deposit insurance according to the provisions of law; have the obligation to provide complete and truthful information about deposits at the request of insured institutions and deposit insurance organizations when carrying out insurance payment procedures. Within 60 days from the time the obligation to pay insurance money arises, the deposit insurance organization is responsible for paying the insurance money to the insured person.
According to Article 25 of the Law on deposit insurance, the insurance amount paid for all insured deposits of a person at a insured institutions includes principal and interest but is only equal to the coverage limit.
The coverage limit is determined by the Prime Minister through each period. The coverage limit is the maximum amount that the deposit insurance organization pays for all insured deposits of a person at an insured institution when that organization is determined by the authorities to be in a circumstance of insolvency or bankruptcy. The maximum amount paid by a deposit insurance organization for all insured deposits according to the provisions of the Law on deposit insurance (including principal and interest) of a person at a insured institution when an obligation to pay arises is 125 million VND
In case an insured institution encounters an insolvency incident, DIV will directly protect depositors through the operation of reimburse insured deposits to depositors with limits prescribed by law. The amount exceeding the limit will be reimbursed during the liquidation of the assets of the insured institutions. Thanks to that, depositors feel more secure when depositing money at credit institutions that participate in deposit insurance, thereby being more proactive in financial transactions, contributing to promoting financial inclusion.
Strengthen the role of DIV to protect depositors better
After nearly 25 years of operation, it can be said that DIV has well protected the legitimate rights and interests of depositors, which is also the protection of financial consumers - the subject and focus of the national Financial inclusion strategy through concretizing deposit insurance policies and synchronously deploying operations to strengthen depositors' confidence in the financial system and raise financial awareness. Thanks to that, consumers make the best choice to participate in financial transactions, while encouraging them to use official and legal financial services. Therefore, in the coming time, it is necessary to further enhance the role of DIV in protecting the legal rights of financial consumers - depositors.
Currently, the Law on deposit insurance is the highest legal basis regulating deposit insurance activities in Vietnam. By legislating and concretizing many contents, the Law on deposit insurance has improved the effectiveness and enforceability of deposit insurance policy, bringing the policy of protecting depositors and ensuring the safety of the banking system to a new level. This law clearly defines the functions and tasks of the State management agency in charge of deposit insurance, deposit insurance organizations, and insured institutions as well as regulations on the rights of depositors, thereby creating an open corridor, clear for deposit insurance activities. During the implementation process, the provisions of the law have come to life and continue to have strong effectiveness.
However, after 10 years of implementation, the Law on deposit insurance has also revealed a number of inadequacies and limitations, due to many changes in practice. Furthermore, the Law does not stipulate, the regulations are unclear or there are regulations but are not consistent with other laws such as: the time when the obligation to reimburse arises, the deposit insurance premium; uninsured deposits; deposit insurance profiteering...
The amendment and supplementation of the Law on deposit Insurance proposed at this time is necessary, in order to improve the effectiveness of depositor protection and protect the safety of the banking system; resolve problems that have arisen during the implementation of this policy in recent times; and to have regulations consistent with relevant laws such as: Law amending and supplementing a number of articles of the Law on credit institutions (Law no.17/2017/QH14), Bankruptcy Law...
Besides, amending and supplementing the Law on deposit insurance also aims to improve the legal basis, in line with international practices, and enhance the position and role of DIV to participate more deeply and effectively in the process of deposit insurance. restructuring the credit institution system, in order to better and more promptly protect the legitimate rights and interests of depositors, and further expand the protection of the legitimate rights and interests of financial consumers.
At the same time, DIV needs to focus on enhancing its role in communication of deposit insurance policies to the public; actively coordinate with competent agencies such as the SBV to organize more policy dissemination and financial education programs for people in localities; periodically evaluate the effectiveness of communication activities through surveys; thereby building a suitable communication strategy for each period. The form of communication needs to spread and reach the majority of people - depositors and credit institutions. At the same time, coordination with authorities at all levels and relevant ministries - departments - branches, legal practice organizations (such as the Vietnam Lawyers' Association, Vietnam Bar Federation), and teams of scientists , a practical activist... has contributed to raising awareness and responsibility of all parties.
With the rapid and strong development of the banking system with a series of new products and services introduced to the market, along with the trend of applying high-tech products, it poses many challenges for the deposit protection mission of DIV. Therefore, in the short term, DIV needs to research and propose periodically increasing the insurance coverage limit; raise public awareness about deposit insurance, especially for those who are disadvantaged in society and have little financial knowledge such as the elderly, people with disabilities, people in remote areas... In the long term, DIV needs to research and apply principles of financial consumer protection to improve the effectiveness of depositor protection.
At the macro level, it is necessary to strengthen the financial capacity of DIV (such as increasing charter capital, diversifying investment portfolio...) to implement deposit insurance policy - policy to protect depositors - financial consumers , ensuring the safe and healthy development of credit institutions.
Communication Department
