How has the interest rate applicable to savings deposits changed? How is the interest rate applicable to savings deposits at the State Bank of Vietnam calculated?
- What is the current maximum interest rate applicable to savings deposits?
- How has the interest rate for demand deposits and terms of less than 1 month changed?
- What is the interest rate applicable to VND deposits of entities, individuals at credit institutions in Vietnam?
- The easiest way to calculate bank interest?
What is the current maximum interest rate applicable to savings deposits?
On March 31, 2023, the State Bank of Vietnam issued Decision No. 575/QD-NHNN in 2023 on the maximum interest rates of deposits in Vietnamese dong of organizations and individuals at credit institutions and foreign bank branches according to Circular No. 07/2014/TT-NHNN dated March 17, 2014.
Specifically:
- The State Bank of Vietnam shall adjust the maximum interest rate applicable to demand deposits with a term of less than 1 month to be 0.5%/year;
- The maximum interest rate applicable to deposits with a term from 1 month to less than 6 months is 5.5%/year.
- The maximum interest rate for deposits in VND at people's credit funds and microfinance institutions is 6.0%/year;
- Interest rates on deposits with a term of 6 months or more are set by credit institutions on the basis of market capital supply and demand.
At the same time, the Decision stipulates that, for interest rates on deposits in Vietnam dong with terms of organizations and individuals at credit institutions and foreign bank branches arising before April 3, 2023, performed until the expiration of the period.
If at the end of the agreed time limit, the organization or individual does not come to receive the deposit, the credit institution or foreign bank branch shall apply the interest rate on the deposit as prescribed in Decision No. 575/QD-NHNN in 2023.
The above interest rate adjustment decision was made in the context of global economic uncertainty, high anchored inflation, and risks of financial and banking instability, making central banks more cautious in tightening currency policies.
How has the interest rate applicable to savings deposits changed? How is the interest rate applicable to savings deposits at the State Bank of Vietnam calculated?
How has the interest rate for demand deposits and terms of less than 1 month changed?
Pursuant to Article 1 of Decision No. 1812/QD-NHNN in 2022 and Article 1 of Decision No. 575/QD-NHNN in 2023, the interest rates for demand deposits with terms of less than 1 month have the following changes:
The State Bank of Vietnam shall adjust the maximum interest rate applicable to demand deposits with terms of less than 1 month from 1.0%/year to 0.5%/year;
The maximum interest rate applicable to deposits with a term from 1 month to less than 6 months is reduced from 6.0%/year to 5.5%/year.
Particularly, the maximum interest rate for deposits in VND at People's Credit Funds and microfinance institutions will be reduced from 6.5%/year to 6.0%/year.
What is the interest rate applicable to VND deposits of entities, individuals at credit institutions in Vietnam?
Pursuant to Article 1 of Circular No. 07/2014/TT-NHNN providing for the maximum interest rate applicable to VND deposits of entities, individuals at credit institutions as follows:
- Credit institutions, foreign bank's branches (hereinafter collectively referred to as credit institutions) shall fix their interest rate applicable to VND deposits of entities and individuals that is not higher than the maximum interest rate applicable to demand deposits, deposits with term of less than one month, deposits with term of one month to less than six month as announced by the Governor of the State Bank from time to time and to specific type of credit institutions.
- Credit institutions shall fix their interest rate applicable to VND deposits with term of six months and more of entities and individuals on the capital demand and supply of the market.
- Deposits shall include such forms as demand deposits, term deposits, savings deposits, deposit certificates, bills of exchange, bills, bonds and other forms of deposits received from entities (other than credit institutions), individuals in accordance with provisions in Clause 13 Article 4 of the 2010 Law on Credit institutions in Vietnam.
The easiest way to calculate bank interest?
Currently, the monthly bank interest rate for term savings deposits is calculated based on the following formula:
Monthly interest = Amount of deposit x interest rate (%year)/12 x number of months of deposit
The monthly bank interest rate for demand deposits is calculated based on the following formula:
Interest amount = Deposit amount x interest rate (%/year) x Number of days actually deposited/365
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