Several major lenders in Taiwan have announced interest rate hikes for depositors from June 20 after the central bank increased its discount from 1.375 percent to 1.5 percent earlier this week.
On June 16, the central bank announced its second discount rate hike this year, which had risen from a historic low of 1.125 percent to 1.375 percent in March, at a time when many central banks around the world have rolled out monetary policy adjustments in the face of inflationary pressures.
In addition, the central bank also raised rates on accommodations with collateral to 1.875 percent, and on accommodations without collateral to 3.75 percent.
Major lenders in Taiwan largely followed suit and raised their time deposit rates by 12.5 basis points. As a result of the two rate hikes in March and June, depositors who own NT$1 million (US$33,670) in time deposit accounts will receive an additional NT$3,750 in interest a year.
Bank of Taiwan
State-owned Bank of Taiwan, the largest lender in the country, has announced increases to its deposit rates of 0.055 percentage points to 0.19 percentage points.
For its benchmark one-year time savings deposits accounts, the state-run bank said the floating rate would rise by 0.125 percentage points to 1.215 percent, indicating the bank’s intentions to fully reflect the central bank’s adjustments.
After the rate hikes in March and June, depositors who have NT$1 million in one-year time savings accounts with the Bank of Taiwan are expected to receive NT$12,150 in interest a year, according to the bank.
Meanwhile, the Bank of Taiwan has also decided to raise its two-year time savings deposits floating rate by 0.125 percentage points to 1.25 percent, while its three-year time savings deposits floating rate will even rise by 13 basis points, higher than the central bank’s hike, to 1.285 percent.
Lank Bank, First Bank, Taiwan Coopereative Bank
Fellow state-run lender the Land Bank of Taiwan said it would raise the floating and fixed rates for all of its time savings deposits accounts by 0.125 percentage points, with the floating rate in the one-year time savings deposits account expected to reach 1.215 percent.
Leading government-investment lender First Commercial Bank said it had decided to raise its one-year, two-year, and three-year savings deposits floating rates by 0.125 percentage points to 1.215 percent, 1.395 percent, and 1.395 percent, respectively, effective Monday.
In addition, First Bank has also decided to raise the fixed rates by no less than 0.145 percentage points to 1.235 percent, 1.26 percent, and 1.27 percent in its one-year, two-year, and three-year time savings deposits accounts.
Fellow government-investment lender the Taiwan Cooperative Bank said it would raise floating rates in its one-year to three-year time savings deposits accounts by 0.125 percentage points.
The bank has decided to boost the fixed rates in the one-year to three-year time savings deposits accounts by 0.125 percentage points to 0.19 percentage points.
While deposit rates will rise in line with the central bank’s rate hikes, market observers said the banking sector was expected to raise mortgage rates by more than 12.5 basis points soon to have a higher interest spread, which is expected to strengthen banks’ profitability.
Source: Focus Taiwan News Channel