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What is a deposit account?

Deposit accounts are geared towards saving money and earning interest on your deposits.

Understanding what a deposit account is can give you the confidence to choose the right product for your savings needs.

The purpose of a deposit account

Deposit accounts are a secure place to save money while earning interest. The term 'deposit' refers to the money put into a bank account. 

These accounts can offer easy access to funds and the security of keeping your money in a bank.

A deposit account can also help you manage your cash flow and budget for future expenses.

Types of deposit accounts

Here are some common types of deposit accounts in Vietnam: 

  1. Savings account
    A basic savings account lets you save money and earn interest. Withdrawal options may be limited.
  2. Time (or term) deposit
    This is a type of savings account that pays you a fixed interest rate for a set term of 1 week to 36 months.
  3. Step-up time deposit
    The interest rate goes up the longer you have your money in this account – from 12 to 24 months. You can also withdraw your money at any time, with no penalty.
  4. Current account
    Current accounts are mostly used for everyday transactions. You can access your funds anytime. Unlike a savings account, you won't earn much interest.
Deposit accounts cater to various financial needs, from everyday savings to long-term investment goals.

Features of a deposit account

For Vietnamese dong deposits that last less than 6 months, banks can only offer interest rates up to a limit set by the Governor of the State Bank of Vietnam. For deposits of 6 months or longer, the interest rate will depend on market supply and demand.

Your deposit account may also come with a minimum balance requirement or set term. 

You can make transactions with current accounts (also called demand or non-term accounts). However, there may be penalties for taking your money out from a time deposit before the term is up. 

Here's a side-by-side comparison of the features to help you decide which account might be best for you:

Deposit accounts – a comparison
Feature Savings account Time & step-up deposit account Current account
Fees Usually no fees Usually no fees May have maintenance fees
Interest rate Moderate, varies by bank Moderate, varies by bank Low or no interest
Purpose Short term, long-term savings, and investments Short term, long-term savings, and investments Daily transactions
Access to funds Limited access until maturity; fund transfer is not allowed Limited access until maturity; fund transfer is allowed Highly accessible, frequent withdrawals allowed
Minimum deposit requirement For HSBC, VND10 million or 1,000 units of foreign currency For HSBC, VND10 million or 1,000 units of foreign currency Usually low or none; for HSBC, VND300,000 within 12 months of opening
Deposit accounts – a comparison
Feature Fees Fees
Savings account Usually no fees Usually no fees
Time & step-up deposit account Usually no fees Usually no fees
Current account May have maintenance fees May have maintenance fees
Feature Interest rate Interest rate
Savings account Moderate, varies by bank Moderate, varies by bank
Time & step-up deposit account Moderate, varies by bank Moderate, varies by bank
Current account Low or no interest Low or no interest
Feature Purpose Purpose
Savings account Short term, long-term savings, and investments Short term, long-term savings, and investments
Time & step-up deposit account Short term, long-term savings, and investments Short term, long-term savings, and investments
Current account Daily transactions Daily transactions
Feature Access to funds Access to funds
Savings account Limited access until maturity; fund transfer is not allowed Limited access until maturity; fund transfer is not allowed
Time & step-up deposit account Limited access until maturity; fund transfer is allowed Limited access until maturity; fund transfer is allowed
Current account Highly accessible, frequent withdrawals allowed Highly accessible, frequent withdrawals allowed
Feature Minimum deposit requirement Minimum deposit requirement
Savings account For HSBC, VND10 million or 1,000 units of foreign currency For HSBC, VND10 million or 1,000 units of foreign currency
Time & step-up deposit account For HSBC, VND10 million or 1,000 units of foreign currency For HSBC, VND10 million or 1,000 units of foreign currency
Current account Usually low or none; for HSBC, VND300,000 within 12 months of opening Usually low or none; for HSBC, VND300,000 within 12 months of opening

Which types of deposit accounts are covered by insurance?

The Deposit Insurance Fund of Vietnam helps to keep your Vietnamese dong deposit accounts safe. These include:

  • Savings accounts
  • Time deposits
  • Demand deposits (such as current accounts)
  • Cash

This insurance currently covers up to VND125 million for each depositor, so you can get your money back within that limit if something goes wrong. 

How to choose the right bank

When choosing a bank for your deposit account, you should think about its reputation and the interest rate you'll get.

You'll also want to consider: 

How easy it is to open an account - Resident Vietnamese citizens can open a single or joint savings or deposit account in both Vietnamese dong and foreign currencies.

What it will cost you - Fees will vary by bank and account type. The bank should clearly outline these fees. 

Online and mobile banking features - Check out the bank's online banking services. A user-friendly platform can make managing your account much easier. 

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