Resident and non-resident foreigners in Vietnam are still permitted to make term deposits at local banks (Photo: VNA)

Last week, some banks announced that they would stop taking savings depositsfrom foreign individuals starting this month to follow the central bank’sCircular 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 maketerm deposits at local banks. Non-resident foreigners in the country are alsoeligible for the service.

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

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

The extension of the savings term will be negotiated between creditinstitutions and clients, according to the circular. The deposits will be usedas collateral, per the current laws.

Currently, the interest rate for VND-denominated deposits in Vietnam rangesbetween 5 percent and 8.5 percent per year, compared with the 2.5 percent ratefor USD-denominated deposits in the US.

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

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

Vietnam ranked first in the world for helping foreign workers save money, with72 percent saying moving to the country helped them save more and just as manystating that they have more disposable income in Vietnam than they did in theirhome country.-VNS