According to data from the State Bank of Vietnam, individual deposits in the banking system reached 7.83 trillion VND by the end of September, marking a 10.9% increase since the beginning of the year. This growth rate for individual deposits is notably higher than in previous years.

Meanwhile, deposits from economic organizations in the banking system amounted to 8.35 trillion VND, an 8.9% increase from the start of the year.

Savings interest rates remained stable until the end of September. Many banks began adjusting them upwards in October, driven by year-end credit demand.

Can Van Luc, Chief Economist at BIDV and Director of the BIDV Training and Research Institute, explained that individual deposits in the banking system are cumulative and consistently trend upwards.

Luc noted that current interest rates remain attractive and surpass inflation, making savings a preferred option for many, especially as other long-term investment avenues appear riskier. With credit growing more robustly than in previous years, banks are actively seeking to mobilize deposits from the public.

Beyond reflecting individuals' demand for saving, Nguyen Huu Huan of the University of Economics Ho Chi Minh City, emphasized that this year's sharp rise in individual deposits must be viewed in the context of accelerating credit growth, particularly in the securities and real estate sectors.

A transaction office at a private bank. *Photo: Giang Huy*

Huan elaborated on the banking system's money creation mechanism: every unit of credit growth generates a corresponding unit of deposits. This explains why deposits in the banking system have increased sharply in line with credit growth. Capital flowing into active investment channels like real estate and securities also drives money circulation within the banking system.

Huan provided an example: if a bank lends money to Mr. A, Mr. A uses it to purchase real estate, transferring the funds to Mr. B. Subsequently, Mr. B either deposits the money in a bank account or uses it for payments, transferring funds to others, which sustains the money's circulation within the banking system.

State Bank of Vietnam data further reveals that by the end of September, the economy's total outstanding loans were estimated at 17.7 trillion VND, an increase of nearly 14% compared to the end of last year. In contrast, credit growth for the same period last year was only about 4%. Given the current momentum, State Bank leaders project full-year credit growth could reach 19-20%, surpassing initial plans and marking the highest growth in 15 years.

Therefore, according to Huan, the strong credit growth observed in the early months of this year is not solely indicative of "people saving more" but also partly a result of the dynamic money circulation within a vibrant economy.

Quynh Trang