Bank Deposit Rate Pressures Spur Competition and Margin Squeeze

Banks and credit unions are confronting a sharp rise in deposit rates that is compressing profit margins and intensifying competition for customer funds. A wave of $2.37 trillion in Certificate of Deposit maturities this year is creating a large inflection point, while stablecoins are being eyed as a potential alternative liquidity source, especially as regulatory frameworks such as the GENIUS Act evolve. At the same time, AI-driven investing tools are increasingly alerting savers to higher‑yield opportunities and automating reinvestments, forcing institutions to improve digital discoverability of their deposit products.

In the first quarter of 2026, 27 listed banks reported a decline in average net interest margin (NIM) to 2.87 %, down from 2.93 % in the previous quarter, as deposit growth lagged behind credit growth. In Vietnam, deposit rates topped 9 % for some long‑term products, yet many banks saw NIMs under pressure, with VPBank posting the highest at 5.17 % while others struggled to keep lending rates in step with deposit costs. Analysts warn that the squeeze on margins may persist into Q2, especially for banks with high loan‑to‑deposit ratios or heavy exposure to real‑estate and consumer lending.