Resident and non-resident foreigners in Vietnam are still permitted to make term deposits at local banks despite some banks saying they would not accept savings deposits from individual foreign customers, the State Bank of Vietnam has said.

Resident and non-resident foreigners in Vietnam are still permitted
to make term deposits at local banks. — VNA/VNS Photo

Last week, some banks announced that they would stop taking savings deposits from foreign individuals starting this month to follow the central bank’s Circular 48/2018/ TT-NHNN, which took effect on July 5. Under the circular, only Vietnamese citizens are allowed to make savings deposits.

However, under Circular 49/2018/TT-NHNN, also effective from the same date, foreigners who reside in Vietnam for six months or more will be able to make term deposits at local banks. Non-resident foreigners in the country are also eligible for the service.

According to the SBV, there is no change in regulations regarding savings of foreigners at banks. However, under the amended Law on Credit Institutions, "term deposits" and "savings deposits" are separate concepts, so the central bank had to issue Circular 48 regulating savings deposits and Circular 49 regulating term deposits.

Under Circular 49, term deposits made by resident and non-resident foreigners must have a maturity date not later than the expiry date of their visa or other valid papers determining the duration of their stay in the country.

The extension of the savings term will be negotiated between credit institutions and clients, according to the circular. The deposits will be used as collateral, per the current laws.

Currently, the interest rate for VND-denominated deposits in Vietnam ranges between 5 per cent and 8.5 per cent per year, compared with the 2.5 per cent rate for US-dollar denominated deposits in the US.

Vietnam is one of the top 10 destinations in the world for expatriate workers according to HSBC’s recently released Expat 2019 Global Report.

Late last year, an HSBC survey also showed that foreign experts in Vietnam could earn an average income of US$90,408 per year. Some 31 per cent of expat workers surveyed claimed their income increased by 25 per cent each year.

Vietnam ranked first in the world for helping foreign workers save money, with 72 per cent saying moving to the country helped them save more and just as many stating that they have more disposable income in Vietnam than they did in their home country.