Currently, many expats are living and working in Vietnam, and for many of them, securing and growing their savings is key to stabilizing their lives. When they have surplus funds, many expats are unsure about the best financial investment option. This is due to the sluggish real estate market, the volatility of gold and stock markets, and the risks involved with lending.
In these cases, depositing money in a savings account is one of the safest and most reliable choices. A savings account allows expats to retain their original amount while earning interest over a specific period. Additionally, the amount in the account is covered by the deposit insurance (DI) scheme, offering further protection. With a savings book in hand, expats can rest assured their money is secure while earning steady returns.
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What is Savings Deposit?
According to Clause 1, Article 5 of Circular No. 48/2018/TT-NHNN, a “savings deposit” refers to money deposited by a customer at a credit institution, with the understanding that both the principal and interest will be fully paid as per the agreement with the institution.
Eligibility for Savings Deposits in Vietnam
According to Article 3 of Circular No. 48/2018/TT-NHNN, the following individuals are eligible:
- Vietnamese citizens aged 18 or older with full civil capacity as per the law.
- Vietnamese citizens aged 15 to under 18 with no limited legal capacity.
- Vietnamese citizens with limited legal capacity or under 15 years of age, whose savings transactions are conducted by legal representatives or guardians.
Based on these legal provisions, foreigners are not eligible for savings deposits in Vietnam. However, credit institutions do offer other types of term deposit products alongside.
How to Calculate Interest?
The interest on savings account is based on the deposited amount, interest rate, and term length. Here’s how to calculate the interest for term deposits (non-compounding interest):
- Daily Interest Calculation: Daily interest = Deposit amount × Interest rate (%/year) × Actual number of days deposited / 365
- Monthly Interest Calculation: Monthly interest = Deposit amount × Interest rate (%/year) / 12 × Actual number of months deposited
- Annual Interest Calculation: Annual interest = Deposit amount × Interest rate (%/year) × Actual number of years deposited
Check Information on Savings Book/ Card
According to Article 7 of Circular No. 48/2018/TT-NHNN, dated December 31, 2018, issued by the State Bank of Vietnam, a Savings Book or Card serves as the certificate of ownership of a savings deposit made at a credit institution. This applies to deposits made at a legal transaction location within the institution’s network.
They should include the following basic information:
- Credit institution’s name and seal, along with the full name and signature of the bank teller and the legal representative of the credit institution.
- Full name, ID number, and the issuance date of the depositor’s identification document, or identification documents of all depositors (if it’s a joint deposit), along with the information of the legal representative, if applicable.
- The savings card number, amount, currency, deposit date, maturity date (for term deposits), deposit term, interest rate, and interest payment method.
- Methods available for depositors to access their savings deposits.
- Procedures for handling lost, damaged, or crumbled savings cards.
In addition to the above information, the savings book may include other details as prescribed by the credit institution.
Note: A savings book can be held jointly by two or more individuals. According to Article 2 of Circular No. 48/2018/TT-NHNN, joint savings deposits can be made by multiple depositors. Per Article 3 and Article 4 of Decision No. 1160/2004/QD-NHNN, the owner of the savings book is the person named on it. In cases of joint ownership, multiple individuals can be listed as co-owners.
Term Deposits in Vietnam for Expats
According to Clause 1, Article 4 of Circular No. 49/2018/TT-NHNN, a “term deposit” refers to a sum of money placed in a credit institution for a fixed term, as agreed between the customer and the institution, with full payment of principal and interest upon maturity.
Unlike savings deposits, term depositors do not receive a savings book; instead, the deposit is maintained within the bank system. Interest rates for term deposits are agreed upon before or after the term, while savings deposit interest rates are paid monthly, quarterly, or at the end of the term.
In accordance with Article 3 of this Circular, the following entities are allowed to make term deposits:
- Residents: Organizations and individuals
- Non-residents:
- Diplomatic missions, consulates, representative bodies of international organizations, and foreign project offices in Vietnam
- Vietnamese citizens not covered by certain provisions of the Ordinance on Foreign Exchange
- Foreign individuals permitted to reside in Vietnam for at least 6 months
Thus, foreign individuals who have resided in Vietnam for at least 6 months are allowed to make term deposits.
Key Notes for Term Deposits
– Agreement Requirements: According to Article 6 of Circular 49, the term deposit agreement must be in writing and include:
- Customer Details: Name, nationality, residency status, and identity proof for individuals or organizations.
- Credit Institution Details: Name and representative of the institution.
- Deposit Details: Amount, currency, deposit term, interest rate, and payment method.
- Checking Account Details: Information about the account used for the deposit.
- Other Terms: Premature withdrawal, extension options, actions in case of lost agreements, and rights and obligations.
– Interest Rate: The credit institution sets the interest rate based on the State Bank of Vietnam’s guidelines.
– Term Extension: The deposit term can be extended as agreed upon, applicable to both residents and non-residents.
– Risk Management: The credit institution is responsible for handling risks like lost or damaged agreements, ensuring the protection of the customer’s rights.
Conclusion
Understanding the terms and requirements for savings and term deposits in Vietnam is essential for both locals and expatriates looking to secure their financial future. With clear guidelines and specific rules, navigating savings deposit options ensures that your funds are managed safely and efficiently. Whether you are a foreigner seeking term deposits in Vietnam or a local considering various saving products, it’s important to understand the process and choose the right options for your needs.
About Us
The Nest Asia is a one-stop resource offering comprehensive information, practical relocation advice, cultural insights, valuable connections, and trusted services to help expatriates living in Vietnam navigate the transition, overcome challenges, and build a fulfilling life abroad. Starting your journey in a new country can often feel overwhelming. The Nest Asia is your trusted partner – we’re here to simplify that process and ultimately make Vietnam feel like home for you and your loved ones.
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Disclaimer: The Nest Asia is not an authorized provider of official government or non-government services. The information provided is intended for general guidance only. While we strive to offer accurate and timely information, we make no representations or warranties regarding its completeness or accuracy.
