File photo of an unidentified person checking Vietnamese banknotes at a bank. The State Bank of Vietnam has issued a new circular relaxing regulations on bank deposit services for foreigners and nonresidential organizations in Vietnam

According to Circular 49, foreigners who reside in the country for six months or more will be able to make term deposits at local banks. Nonresidential organizations such as branch offices, representative offices, diplomatic agencies and consulates in Vietnam are also eligible for the service.

The circular will take effect from July 5, according to Thanh Nien Online website.

At present, nonresidents in Vietnam have to meet strict requirements to open accounts at local credit institutions.

For deposits in Vietnamese dong, foreigners have to provide their work permit, labor contract and salary statement. Meanwhile, local banks only accept savings in foreign currencies for expats with a valid visa who have lived in Vietnam for at least 12 months.

Besides this, 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.

A survey conducted by HSBC Bank in late 2018 showed that foreign experts in Vietnam could earn an average income of some US$90,408 per year. Some 31% of expat workers surveyed claimed their income increases by some 25% each year.

Further, Vietnam ranks first in the world for helping foreign workers save money, with 72% saying that moving to Vietnam helps them save more and another 72% stating that they have more disposable income in Vietnam than they did in their home country. Both are higher than the global average: 52% for savings and 56% for disposable income.

The most popular purpose for their savings or investments is still retirement (43%), followed by buying their first or an additional piece of property (30%). Two-thirds (66%) of expats in Vietnam said that they feel confident about the economy of the Southeast Asian nation.

Currently, Vietnamese banks are offering deposit rates in dong that are higher than other countries, ranging from 5% to 8.5% per year compared to some 2.5% per year in the United States. SGT