Vietnam Banks Seek to Lure More Gold Deposits
Commercial joint stock banks in Vietnam are trying to attract more gold depositors by continuously increasing interest rates, the HCM City Law newspaper reported June 2.
The interest rates for gold deposits have been raised to 6.5 per cent per annum, the highest level so far. Viet A is taking the lead among banks in offering the highest interest rates for gold deposits, at 6.5 per cent per annum on 12-month term deposits.
High interest rates for short-term deposits prove very attractive to depositors, an official from VietA Bank said, adding that the lender is capable of mobilizing capital worth VND20-30 billion in gold a day.
In fact, not all banks dare to mobilize capital in gold as it is difficult to turn gold into cash, while the gold price fluctuations may cause risks for banks.
The gold lending market is therefore being exploited by only 10 banks at the moment.
The volume of gold mobilized by commercial banks has sharply increased in recent times compared to previous years with the total value estimated to rise to VND18 trillion-VND24 trillion, the Vietnam Gold Business Association said.
Currently, many want to make deposits in gold as they can still keep gold in hand, which protects them from high inflation, while they can make profit on the gold.
If gold prices increase, people make double profit on gold deposits because they can earn money from both the price increases and the interest rates on the deposits.
According to a recent report from the World Gold Council (WCC), Vietnam had investment demand of over 32 tons of gold in the first quarter this year, making it the global largest gold investment market in the period. (HCM City Law)
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