Vietnamese banks are racing to lock in savers before a regulator-ordered cut in deposit rates takes hold, a move that could ease funding costs but also squeeze a sector that has relied on high-yield deposits to keep credit flowing.
Vietnamese Banks Cut Deposit Rates After SBV Order
The scramble matters because deposit pricing sits at the center of banks’ cost of capital. If lenders can bring down what they pay savers, they have a better chance of lowering loan rates and supporting the economy; if they cannot, credit remains expensive just as year-end demand picks up.
Sentiment Indicators
In the past few days, bank staff have flooded Facebook and Zalo groups with “last chance” offers, called customers directly and dangled short-term promotions to beat the coming reduction. One branch in Ho Chi Minh City was still urging clients late on Oct. 19 to move money in before a six-month term offer of 9.2% expired.
The State Bank of Vietnam has told lenders to cut deposit rates by at least 0.5 percentage point on terms of six months and longer, warning that banks failing to comply could face tighter credit limits or other supervisory penalties. The central bank is trying to cool a competition for funding that has kept deposit rates elevated for months and complicated efforts to bring down lending costs.
According to official statistics, the highest listed rate for six- to 12-month deposits reached 8% in August, up 2.5 percentage points from a year earlier. A market survey this week found many banks still offering 6-month rates of 8.5% to 9.2%, while 12-month and 24-month terms could fetch as much as 9.3% and 9.8% in some cases through promotional bonuses.
Fifteen banks, including ACB, TPBank, Sacombank, SeABank and LPBank, have already announced new tables that cut listed rates below 7% for longer tenors. Even so, analysts say the adjustment may be slow in practice because credit demand tends to accelerate late in the year and banks still need to defend deposit growth targets.
The tension is structural: Vietnam’s loan growth has outpaced deposit growth, leaving the banking system with a funding gap that had widened to nearly 2 quadrillion dong before narrowing to below 1.5 quadrillion dong, according to local reporting. That improvement suggests liquidity is getting better, but not enough to justify a rapid fall in rates.
For investors, the direction of deposit costs is crucial for bank margins and loan growth. Lower funding costs should support net interest margins over time, particularly for lenders that depend heavily on term deposits, but a too-quick drop could also trigger deposit outflows or force banks to compete on fees and promotions instead of headline rates.
The broader macro backdrop is mixed. Vietnamese policymakers want cheaper credit to support growth, but inflation pressures have picked up again and the Federal Reserve remains restrictive, limiting room for a looser domestic monetary stance. That leaves fiscal policy — especially faster public investment disbursement — as the main offset helping liquidity.
For now, the likely outcome is a slower, managed decline in deposit rates rather than a sharp reset. Banks that have been paying up for funding may see relief, but the pace of loan-rate cuts will depend on whether liquidity keeps improving into early 2027 and whether the State Bank follows through on enforcement.
| Entity | Gains | Losses |
|---|---|---|
| Borrowers | ▲Lower loan rates ahead | ▼Banks charging high funding costs |
| Banks with strong liquidity | ▲Margin relief from lower deposit costs | ▼Banks reliant on hot money |
| Savers | ▲Short-term “last chance” high rates | ▼Lower yields on new deposits |
| State Bank of Vietnam | ▲More orderly rate environment | ▼Aggressive rate competition |
