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On November 1, 2024, the State Bank of Vietnam (SBV) issued Decision No. 2411/QD-NHNN, establishing the maximum interest rates applicable to Vietnam-dong (VND) deposits of organizations and individuals at credit institutions and foreign bank branches. These regulations, implemented under Circular No. 48/2024/TT-NHNN, aim to regulate interest rates and ensure stability in the financial market. The decision will take effect on November 20, 2024.
Key Provisions of Decision No. 2411/QD-NHNN
Maximum Interest Rates for Demand Deposits and Short-Term Deposits
- Demand deposits and deposits with a term of less than one month are capped at 0.5% per annum.
Maximum Interest Rates for Fixed-Term Deposits
- Deposits with a term of one month to less than six months are capped at 4.75% per annum.
- For People’s Credit Funds and Microfinance Institutions, the maximum rate for deposits with a term of one month to less than six months is slightly higher at 5.25% per annum.
These rates also align with the regulations outlined in Circular No. 07/2014/TT-NHNN, dated March 17, 2014, which govern similar deposit categories.
Objectives and Implications
The updated rates reflect SBV’s efforts to ensure sustainable credit growth, maintain liquidity in the banking system, and protect depositors.
This decision particularly addresses the needs of small-scale financial institutions such as People’s Credit Funds and Microfinance Institutions by offering them a higher cap, supporting their role in providing financial services.
Effective Date and Implementation
Decision No. 2411/QD-NHNN is effective on November 20, 2024. Financial institutions must promptly update their deposit offerings to comply with the new regulations.
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