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In Vietnam, interest rates are decided by the State Bank of Vietnam (SBV), or central bank.
Lenders then set their own interest rates, according to the SBV base rate and other factors.
Bank interest rate is the rate of deposit capital that the bank or borrower must pay to the depositor or bank. It must be paid either yearly or monthly. The depositor or borrower can be an individual, business or bank.
Bank lending interest rate is the amount borrowers are charged by lenders, as a percentage of the money borrowed. Deposit interest rate is the money you earn for keeping your deposits in savings, time and other accounts.
While lenders reserve the right to change interest rates without prior notice, their rates will never exceed the interest rate caps by the SBV and other regulations.
Based on typical lending activities, bank interest rates can be divided into 6 types:
Explore more: HSBC interest rates and fees
Bank interest rates are always changing. If inflation – the rate at which the prices of goods and services increase – is rising too quickly, the SBV may raise the base interest rate to reduce the money supply in the market, tightening the currency. If inflation is too low, it may cut the base rate to stimulate the economy, which means bank interest rates may fall as well.
Besides inflation, other factors that can affect bank interest rates include:
The State Bank of Vietnam generally reviews the base rate a few times a year. It doesn't change every time and can stay the same for years.
When calculating interest, you must look at the:
So the formula looks like:
Interest Amount = (Actual Balance x Number of Days Maintaining the Actual Balance x Interest Rate) / 365
This calculation applies to both loan and deposit products.
Simple interest is interest charged on borrowing that's calculated using an original principal amount and a fixed interest rate. The interest rate yield is usually smaller than that of compound interest, and the principal remains unchanged.
The formula for simple interest is: Principal x Interest rate x Time
Compound interest is the interest on the compounding of the previous period's interest through the principal. It's also a way to calculate interest on bank deposits.
The interest rate yield is usually greater than that of simple interest. The principal changes throughout the loan/deposit cycle.
The formula for compound interest is: P x [(1 + Interest rate) N − 1]
Where:
P = Principal
N = Number of compounding periods
Compare loan interest rates between our loan products.
Interest rates can affect:
The way you spend money
How much it costs to borrow money
A lower base rate is good news for borrowers, because the rate of interest you get charged may be lower. This means you could have more money left each month to pay off debt, save, or spend.
When it's cheaper to borrow money, it can be a good time to get a mortgage or a personal loan, for example. Businesses may also look to borrow funds for higher-yielding investments such as real estate, bonds, stock investments or business expansion.
But remember: if you borrow money when interest rates are low, you need to make sure you can afford the repayments now and in the future – in case interest rates go up.
Low interest rates are good news for borrowers, while higher base interest rates are good news for savers. You may be able to earn more deposit interest on your savings. This can encourage people to save more than when interest rates are low.
How much changing interest rates will affect your savings depends on the type of savings account you have and how much you've saved.
As interest rates rise and fall, so can mortgage rates. How this affects you depends on your:
If you have a fixed-rate mortgage, your interest rate stays the same for a set period. So, even if bank interest rates change, your monthly payments won't be affected during this time. When your fixed rate ends, you might be moved to your lender's Standard Variable Rate.
For variable-rate mortgages, changes in the bank's base rate can directly affect your monthly payments.
Keep in mind – mortgage rates are based on several factors, not just changes to the base rate.
You can use our mortgage calculator to work out how your monthly payments might be affected.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please contact our Call Center at (84 28) 37 247 247 (South) or (84 28) 67 707 707 (North) or (84 28) 37 247 666 (Premier) for the latest rates.
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