Seeking higher bank interest rates. Cambodia? Vietnam ?

[how241]

I have recently seen interest rates of 7.4%-8.5%  at major Vietnam banks and 6%-7% at Cambodia Banks for 8-12 month accounts.  As a foreigner, has anyone recently opened any accounts with them ?   What was your experience?  Do you think it is risky ?  I was reading that they offer accounts in US dollars and Thai baht, along with their own currency.  What do you think ???

[how241]

It looks like no one has tried any of these banks. 

[jphasia]

I have a fixed term deposit account in Vietnam.

But: you need to be "resident" in Vietnam. By "resident" I mean having a TRC (Temp Residence Card) that you obtain only if you have a work permit or married to local.

The fixed term deposit are in VND only and maximum duration can be only the validity of your TRC. For example, my TRC is 2 years so the maximum duration is 2 years for me.

You can choose duation from 3 months at 5% rate, 6 months 8.5% and up 12 months 9%. The minimim deposit is 1 BVND (appr. 40 KUSD). No taxations on the interest.

These are the conditions from the bank I am using (Standard Chartered). I am not sure about the other banks.

The main thing is that the money in and out (especially out the country) is strictly controlled but as long as you have evidences of the incomes you are fine.

I think the risk is the same as other countries. I took the risk because I am working in Vietnam, having my salary paid here in USD (I have accounts both in USD and VND). I am using Standard Chartered bank which is international bank anf easy to transfer money abroad having work permit and TRC here. As I live in Thailand (in Vietnam for work only), it is better for me to make my incomes and saving generating interest here than in Thailand where interest rates are really low.

[nigelforbes]

Exchange rate risk and inflation risk can reach unacceptable levels historically in Vietnam 

[save the frogs]

I am not resident, so I don't use those banks.

But I did a bit of research on Cambodia a while back.

Some of the banks are owned by foreign banks. 

ABA Bank, for instance, seems to be owned by a major North American bank with 300 billion dollars in assets.

https://www.ababank.com

 

[how241]

7 hours ago, jphasia said:

But: you need to be "resident" in Vietnam. By "resident" I mean having a TRC (Temp Residence Card) that you obtain only if you have a work permit or married to local.

I don 't have either of whose so I guess Vietnam won't work for me.  I wonder if the bank managers can 'rubber stamp'  the paperwork so you can get around these requirements ?

[how241]

5 hours ago, save the frogs said:

I am not resident, so I don't use those banks.

But I did a bit of research on Cambodia a while back.

Some of the banks are owned by foreign banks. 

ABA Bank, for instance, seems to be owned by a major North American bank with 300 billion dollars in assets.

https://www.ababank.com

 

Thanks.  Good info.  Some of the larger banks in Vietnam also seem very safe.

[how241]

I won't mind just keeping my money in Thailand 'if' they would raise up the rates to at least 3%.  I don't think that will happen anytime soon.

[jphasia]

2 hours ago, how241 said:

I don 't have either of whose so I guess Vietnam won't work for me.  I wonder if the bank managers can 'rubber stamp'  the paperwork so you can get around these requirements ?

Maybe but I doubt. Only to open an account, they are very strict on paperwork. 

[jphasia]

9 hours ago, nigelforbes said:

Exchange rate risk and inflation risk can reach unacceptable levels historically in Vietnam 

Yes agreed. But all depend on your tolerance to take the risk.

[how241]

12 hours ago, nigelforbes said:

Exchange rate risk and inflation risk can reach unacceptable levels historically in Vietnam 

The exchange rate can either be good or bad for you depending on what it is compared to when you made your deposit. You can either make extra money or lose some but it won't really matter if you decide to roll over your fixed account into another term deposit.  As long as you don't have an immediate need for your money you can usually wait for the exchange rate to be in your favor.  As with most any investments,  there is always risk.

Edited March 5, 2023 by how241

[nigelforbes]

1 hour ago, how241 said:

The exchange rate can either be good or bad for you depending on what it is compared to when you made your deposit. You can either make extra money or lose some but it won't really matter if you decide to roll over your fixed account into another term deposit.  As long as you don't have an immediate need for your money you can usually wait for the exchange rate to be in your favor.  As with most any investments,  there is always risk.

Inflation is the killer in Vietnam, banks are offering 5% for 3 months but the rate of inflation easily exceeds that, which means your savings are losing money by going backwards.

 

https://tradingeconomics.com/vietnam/core-inflation-rate#:~:text=Core Inflation Rate in Vietnam,percent in January of 2021.

 

 

 

Edited March 5, 2023 by nigelforbes

[how241]

1 hour ago, nigelforbes said:

Inflation is the killer in Vietnam, banks are offering 5% for 3 months but the rate of inflation easily exceeds that, which means your savings are losing money by going backwards.

Thanks !!!    Good info,  certainly something to think about.  I wonder how that relates to Thailand savings rates,  probably also going backwards.

Edited March 5, 2023 by how241

[lkn]

3 hours ago, how241 said:

The exchange rate can either be good or bad for you depending on what it is compared to when you made your deposit. You can either make extra money or lose some but it won't really matter if you decide to roll over your fixed account into another term deposit.  As long as you don't have an immediate need for your money you can usually wait for the exchange rate to be in your favor

Generally countries that offer high interests are countries with weak currencies that are only getting weaker, and when it comes to developing countries that underperform compared to more developed countries, you should not expect the exchange rate to “get back” to where it was, when you exchanged the money.

 

I know someone who 5-6 years ago was tempted and exchanged a large part of their money from THB to LAK because of a 6% interest rate on a one year fixed deposit account. I did try to talk them out of it, but alas, and despite the 6% yearly gains, the value in THB is now down > 20%

 

Making it worse is that this person actually sold Apple shares to make the “investment”.

[how241]

1 hour ago, lkn said:

Generally countries that offer high interests are countries with weak currencies that are only getting weaker, and when it comes to developing countries that underperform compared to more developed countries, you should not expect the exchange rate to “get back” to where it was, when you exchanged the money.

Thanks,  you have made some good points.  

[nigelforbes]

5 hours ago, how241 said:

Thanks !!!    Good info,  certainly something to think about.  I wonder how that relates to Thailand savings rates,  probably also going backwards.

[Ste78]

my wife has Canadia Bank in Cambodia but she's Khmer

 

Website or APP works very well and it's easy to select/block the money.

 

You can either convert KHR to USD and back in real time (Need to accounts) and lose almost nothing in the conversion.

 

If blocked as KRH the rate is around 2% higher than USD, even if the conversion is fixed for long time.

 

Almost expired the 1y deposit in KHR, but would block now USD just to be sure anything would happen

[how241]

Thanks for the info.

[Caldera]

You can't just walk into those countries as a tourist and open bank accounts nowadays.