Bank deposit interest rates in Vietnam in February 2024. Formula for calculating interest rates

Hello, Lawnet would like to answer as follows:

1. What is bank deposit interest rate under the law in Vietnam?

According to Article 12 of the Law on the State Bank of Vietnam 2010, interest rates are regulated as follows:

- The Stale Bank shall announce the re­financing interest rate, prime interest rate and other interest rates to serve the regulation of the monetary policy and the fight against usury.

- In case abnormal developments are seen in the monetary market, the State Bank shall provide for a mechanism for regulating interest rates applicable to credit institutions in their relations with others and their clients and in other credit relations.

At the same time, Article 91 of the Law on Credit Institutions 2010 has regulations on bank interest rates as follows:

- Credit institutions may fix and shall publicize deposit interest rates and service charge rales applied in their business activities.

- Credit institutions and their clients may agree on interest rates and credit extension charges to be applied to their banking operations according to law.

- In case banking operations experience abnormal developments, in order to assure safety for the credit institutions system, the State Bank may provide a mechanism for determining charge and interest rates applicable to business activities of credit institutions.

It can be understood that the bank deposit interest rate is the interest rate that the bank pays for deposits by organizations or individuals into the bank. Deposit interest rates have many different levels depending on the type of deposit (non-term, term, savings, etc.), deposit term, and deposit size.

Currently, there are two types of deposit interest rates: demand deposit interest rates and term deposit interest rates.

2. Bank deposit interest rates in Vietnam in February 2024

Source: vietnamnet.vn

3. Formula for calculating bank deposit interest

To quickly calculate bank deposit interest, you can apply the following interest calculation formula:

Interest = Deposit x interest rate/12 months x actual number of months deposited

For example: If you save 200 million VND at bank A for a 12-month term, with an interest rate of 5.0%, the interest received is as follows: 200 million VND x 5.0%/12 x 12 months = 10 million VND.

With the same amount and term above, if you deposit savings at bank B with an interest rate of 5.3%/year, the amount you can receive will be: 200 million VND x 5.3%/12 x 12 months = 10.6 million VND.

4. Current bank interest rates when depositing savings in Vietnam

According to Decision 1124/QD-NHNN, from June 19, 2023, the maximum interest rate for Vietnamese Dong deposits of organizations (except credit institutions and foreign bank branches) and individuals at credit institutions and foreign bank branches according to the provisions of Circular 07/2014/TT-NHNN is as follows:

- The maximum interest rate applicable to demand deposits with a term of less than 1 month is 0.5%/year.

- The maximum interest rate applicable to deposits with terms ranging from 1 month to less than 6 months is 4.75%/year; Particularly, the People's Credit Fund and microfinance institutions apply the maximum interest rate for deposits with terms ranging from 1 month to less than 6 months at 5.25%/year.

Best regards!

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