What is a deposit account?
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:
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Savings accountA basic savings account lets you save money and earn interest. Withdrawal options may be limited.
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Time (or term) depositThis is a type of savings account that pays you a fixed interest rate for a set term of 1 week to 36 months.
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Step-up time depositThe 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.
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Current accountCurrent accounts are mostly used for everyday transactions. You can access your funds anytime. Unlike a savings account, you won't earn much interest.
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:
| 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 |
| 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:
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Savings accounts
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Time deposits
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Demand deposits (such as current accounts)
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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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