Interest rates have dropped sharply, why do people still put money in banks?

Although the deposit interest rate only fluctuates around 5%/year, the amount of money people deposit in banks still increases dramatically.

According to financial expert Nguyen Tri Hieu, one of the reasons why people still put money into banks despite low interest rates is that compared to other investment channels such as stocks, gold, real estate, digital currency, etc., savings always have the advantage of being safe and less volatile. Especially for those who do not like the "taste" of risk or whose main purpose is to preserve assets, banks are the most suitable storage channel.

Bank deposits still increase strongly despite low interest rates. (Illustration photo)

Sharing the same view, expert Nguyen Quang Huy, CEO of the Faculty of Finance and Banking at Nguyen Trai University, further analyzed: Regarding the real estate channel, after a "hot" increase, the market has shown signs of slowing down in recent months. In addition, the lack of synchronous legal regulations also makes many people hesitant.

Regarding the stock market, although the market index has improved, there are still potential risks when the international and domestic economic context is still uncertain. Investors are waiting for clearer signals when the macro economy is stable, international trade conflicts are resolved and there are steps in upgrading the market.

Not to mention this channel is only suitable for investors with experience and knowledge to understand the rules of the game. In fact, many new or "inexperienced" investors will easily lose money.

In the gold and foreign currency channels, gold prices have recently slowed down after reaching record highs. Previous fluctuations and strong reversals have also made many people worried about risks. Moreover, buying gold has become difficult due to a shortage of supply. Meanwhile, the foreign currency channel is limited by foreign exchange market management policies and exchange rate risks.

Based on these bases, Mr. Huy predicts that in the last 6 months of the year, bank deposits may still reach new records when people's savings trend is dominant.

Meanwhile, expert Nguyen Tri Hieu said that in the last months of the year, banks' deposit interest rates will increase to continue attracting more capital from people.

According to the State Bank, total deposits by the end of the first quarter were approximately VND15 trillion, of which mobilization from the population continued to increase sharply. Of the total VND15 trillion in deposits in the banking system, nearly VND7.5 trillion came from the population - an increase of more than 5.73% compared to the beginning of the year. Thus, in just the first 3 months of the year, people deposited more than VND404,800 billion in banks.

Currently, the 12-month deposit interest rate at private joint-stock commercial banks fluctuates around 5%/year. The group of state-owned banks also remains low, around 4.7%, a slight decrease compared to the beginning of the year.

Thanh Lam

Source: https://vtcnews.vn/lai-suat-giam-manh-vi-sao-nguoi-dan-van-do-tien-vao-ngan-hang-ar952690.html