I want to open a cash deposit account here. What banks do you recommend? And why do certain banks, like HSBC, require only a passport to open an account while others like Citibank and Sacombank require work permits, and a lot more paperwork?

Thanks for your question. I would like to start with the second part first. Whether you are looking to open a bank account or a term deposit here the paperwork can feel quite onerous, but there is a very important reason for this. Banks need to follow a form of compliance called Know Your Customer (KYC). It is primarily there to combat money laundering and, more importantly to foreigners, here to set up the time and transactional limits that you are legally allowed to do.


The information that they require is to prove who you are, where you live, who you work for and how much you earn. Each individual bank may have different internal regulations on what they can choose for each category and change all the time from bank to bank as there is no fixed procedure for all the industry here yet.

Where they ask for a copy of your work contract and who you work for and possibly your work permit is purely for transactional reasons, firstly to show how much you can legally transfer out of the country. If you hold a resident account rather than a non-resident account, this will show to the bank how long you are due to be in the country and the bank is within its rights to withhold products from you. For example, if you have six months left on your contract and even though you know your contract will be renewed, some banks will not allow you to open a 12 month deposit account.

Man holding piggy bank. Shallow DOF

As for cash deposits or term deposits, you need to look at the product and why you want to use them. At Total Wealth Management, we would not recommend one particular bank to place your term deposit with. This is because each person is different and they will have different needs but mainly, the market here is very fast moving, especially if you want to chase headline rates. Before looking at term deposits there are a few things you need to know:

The double figure headline rates that you see are for dong only. Not for US dollar or any other foreign currency. If you have US dollars you will lose money on the FX conversion at outset and then again at maturity if you want it back in US dollars. The interest that you earn will need to stay in dong. You can withdraw this or spend it as dong but you are unable to withdraw this as a foreign currency or even transfer the value of it abroad.

The term and cash deposit rates in Vietnam are high, but dropping at the time of writing. However you should never just chase the rate. Find out which product suits your needs the most. Think of what the reason is for having the deposit, the time scales you are looking at and what you want to get out of it.

Have a finance question you want answered? Email us at finance@oivietnam.com.

Bio: Paul McLardie is a partner and a member of the investment committee at Total Wealth Management in Saigon. Previously he was Head of Wealth Management for a firm in Moscow and before then spent eight years at Barclays Bank UK within the Private Clients and Large Corporate sectors.