What are forms of deposits eligible for premature withdrawal in Vietnam? What are the interest rates on premature withdrawal of deposits in Vietnam?
What are forms of deposits eligible for premature withdrawal in Vietnam?
Pursuant to the provisions in Article 3 of Circular No. 04/2022/TT-NHNN on the forms of deposits eligible for premature withdrawal, including:
- Time savings deposits
- Time deposits.
- Deposit certificates, bills, treasury bills, and bonds issued by credit institutions.
- Other forms of receiving time deposits according to the Law on Credit Institutions of Vietnam.
In which:
According to the provisions of Clause 1, Article 4 of Circular No. 49/2018/TT-NHNN, “term deposit” means a sum of money of a customer held at a credit institution for a fixed term as agreed upon between the customer and the credit institution with the principle of full payment of principal and interest to the customer.
According to the provisions of Clause 1, Article 5 of Circular No. 48/2018/TT-NHNN, “savings deposit” means an amount of money that a depositor deposits at a credit institution following the principle that principal and interest will be paid in full under an agreement with the credit institution.
What are forms of deposits eligible for premature withdrawal in Vietnam? What are the interest rates on premature withdrawal of deposits in Vietnam? (Image from the Internet)
What is premature withdrawal of deposits?
Pursuant to Article 4 of Circular No. 04/2022/TT-NHNN on premature withdrawal of deposits as follows:
- Premature withdrawal of deposits is when a client withdraws a part or all of the deposit before the due date or maturity date of such deposit.
- Credit institutions and clients shall make agreements on the premature withdrawal of deposits in compliance with regulations of the State Bank of Vietnam regarding each specific form of deposit.
Interest rates on premature withdrawal of deposits are agreed upon in accordance with regulations prescribed in Article 5 of Circular No. 04/2022/TT-NHNN. If no agreements on premature withdrawal of deposits are made, credit institutions shall apply the interest rates on premature withdrawal of deposits following the regulations of Circular No. 04/2022/TT-NHNN.
What are the interest rates on premature withdrawal of deposits in Vietnam?
Pursuant to Article 7 of Circular No. 49/2018/TT-NHNN on term deposit interest rates as follows:
Interest rate
1. Each credit institution may set forth term deposit interest rates in conformity with regulations of the State Bank of Vietnam on interest rates in every period.
2. Term deposit interest calculation method shall be according to regulations of the State Bank of Vietnam.
3. The deposit term interest payment method shall be determined according to the agreement made between the credit institution and the customer.
Pursuant to Article 9 of Circular No. 48/2018/TT-NHNN on interest rates of term savings deposits as follows:
Interest rate
1. Each credit institution sets forth regulations on savings deposit interest rate in accordance with regulations of the State Bank of Vietnam on interest rates in every period.
2. Savings deposit interest calculation method shall be accordant with provisions of the State Bank of Vietnam.
3. Savings deposit interest payment method shall be made as agreed upon between the credit institution and the depositor.
Thus, when making a term deposit, the law respects the agreement of the parties, however, the interest rates on term deposits and term savings deposits must not exceed the interest rate limit specified by the State Bank of Vietnam in every period.
Pursuant to the provisions in Article 5 of Circular No. 04/2022/TT-NHNN on interest rates on premature withdrawal of deposits as follows:
Interest rates on premature withdrawal of deposits at credit institutions and foreign bank branches are regulated as follows:
- When a client withdraws all of the deposit: credit institutions shall apply a maximum interest rate equal to its lowest interest rate of demand deposits based on the type of client and/or the currency of the deposit when such client withdraws it.
- When a client withdraws a part of the deposit:
+ Regarding the part of withdrawn deposit before maturity, credit institutions shall apply a maximum interest rate equal to its lowest interest rate of demand deposits based on the type of client and/or currency of the deposit when such client withdraws it;
+ Regarding the remaining deposit, credit institutions shall apply the interest rate equal to the interest rate applied to the deposit that the client has withdrawn a part.
Thus, the State Bank of Vietnam has specified in detail the application of interest rates on premature withdrawal of deposits at credit institutions and foreign bank branches. It can be seen that Circular No. 04/2022/TT-NHNN has specifically divided the interest rates on premature withdrawal of deposits in case of withdrawal of all of the deposit and withdrawal of a part of the deposit.
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