July 2019 was the End of a financial El Dorado – Vietnamese Savings account. With a 8.6% ROI for a minimum of 4.300 $US, it was a nice move for any foreigners (not Vietnamese citizen) looking for an easy investment with the possibility to withdraw from on demand.
If the online Saving/Term deposit is not available for foreigners anymore, they can still apply to the Certificate of Deposit from Vietnamese banks.
What is a Certificate of Deposit (CD)
In exchange for the customer depositing the money for an agreed term, institutions and banks grant higher interest rates. If the rates is higher, you also agree that you cannot touch your money for a predetermined amount of time 😉
If you decide to withdraw before maturity, it may cost you some penalties. More details about the CD on WikiPedia.
In Vietnam, the difference with the common online deposit/ saving, is you will have to sign a lot of papers (hard copies) to agree with the terms. By experience you will end receiving 4 documents for a minimum 100.000.000 VND investment for a period of 6 months:
- 5 years contract agreement with the bank
- 1 document including the buying price, the period and the shares at start
- 1 document including the final selling price and the shares at maturity (the total is NET, taxes are deducted)
- 1 certificate
How to apply to a CD in Vietnam
First, you now have to prove your incomes (labor contract, money already in your Vietnamese account, dividends, etc…).
You also have to sign contracts and receive the certificate, which make it almost impossible to fully open it online. If most of the job can be done through emails, and messages, at the end of the road, your bank will need you to show up to receive documents.
One more point to notice, is the maximum period (maturity) that cannot exceed your Visa or Resident card validity. By experience, banks request a minimum 6 months period, and it’s also the minimum viable period to get a good % interest, so you should consider the opening/starting date accordingly.
In another article, we list down the best Vietnam bank to get the highest interest rate for Certificate of Deposit.