I have just moved from Madrid to Saigon, and have taking a job as a junior manager at a local manufacturing company. My general manager is a lovely Vietnamese man, and he has told me that I am responsible for opening my own bank account while I am in the country. I have noticed that among all the Vietnamese banks operating in the city, that there are also many foreign banks. I have decided that I would like to open an account with a foreign bank as they are all familiar; however, I don’t have time to look through all the fees and various charging structures across all the banks. Bear in mind that I am still paying off some student debt back home and would like to transfer money back to my home country every 3 months. I get paid in Vietnamese Dong. Also, I am on a very basic expat salary so would be looking for an option that would not punish me too much, in terms of charges, for my account balance falling below a certain level. I’m looking for an option that would be cheapest for me. Any help would be much appreciated.
Welcome to Saigon! The foreign banks you are referring to, I presume, are: HSBC, Commonwealth Bank, Citibank, Standard Chartered, and ANZ. Please remember that these are technically not foreign banks. Yes, they have overseas brands; however, they are essentially only franchises operating in Vietnam and are therefore considered to be Vietnamese banks as well. I believe that the English service at these banks might be slightly better than the local Vietnamese brands, however this I am not 100% sure of as I have not had the opportunity to sample the service of every bank in the country. What I have done is taken some time to look through the individual tariff schedules from all the banks listed above, and give you a hand with some very basic cost comparisons.
Opening a bank account in Vietnam would require you to produce a proof of identity, usually a copy of your passport, as well as proof of employment, which could be your work permit or a letter from your company (your boss could help you with this). The best thing to do would be to go to whichever bank you wish to open an account with first and ask exactly what documentation you require. This might save you some time.
In terms of opening an account at the bank, this will be free of charge at all the banks listed above. You will be issued a debit card with which you will be able to withdraw money free-of-charge at your bank’s ATMs, and, in certain cases, free of charge at other ATMs.
If you happen to quit your job within your first year and you want to close your account, Standard Chartered will charge you the least for this, 100 000 VND.
Standard Chartered also requires you to have the least minimum average monthly balance (1 000 000 VND), as you will be charged for not keeping your bank balance at the minimum level. Standard Chartered also charges the least for falling below the minimum level (100 000VND per month), slightly cheaper than the others.
As mentioned before, making withdrawals from your bank’s ATMs will be free-of-charge; however, you might not always be within close proximity of one and might have to withdraw from another bank, which will incur charges.
Usually you will be subject to the other bank’s charges for withdrawing at their ATMs, which differ for every company. Citibank is quite flexible in this regard as you are able to withdraw for free, if you are a Citibank account holder, at any ATM which is part of the VISA network (has the VISA logo visible on ATM). This is the same for ANZ account holders. Making withdrawals from your Vietnamese account overseas is a different story, as you are usually charged between 4%-4.5% of the transaction as a forex administration fee, regardless of whether you withdraw from your bank’s ATMs or another. Some banks will charge a fixed VND fee for every transaction as well, so make sure you don’t make too many withdrawals while abroad. Make 100% sure you can use your debit card abroad. Ask a representative from your bank before travelling.
When it comes to remitting funds to and from your bank account, the only two banks that will charge you for inward remittance into your VND account from overseas are Commonwealth Bank and ANZ. The others do not charge for this. At all banks you have the option of registering for an internet banking facility, from where you are able to transfer funds to other banks in Vietnam and abroad. All the banks charge a minor fee for transferring funds to 3rd party banks within Vietnam via internet banking, however Citibank does not charge for this. Citibank does also not charge for transferring funds overseas via their internet banking facility. Remember that if you are transferring funds from your VND account which is converted to a foreign currency, that you will receive the commercial rate of exchange, and not the “true” rate, i.e. you would be purchasing Euro at the bank’s rate in Vietnam, not Spain. This could be to your disadvantage.
The best thing to do would be to take the activities into account that are likely to take place the most on your account, i.e. domestic transfers, domestic ATM withdrawals, overseas ATM withdrawals or overseas transfers, and select the bank that would charge you the least for the services you use the most.
If you require detailed tariff schedules from all the institutions mentioned in this article, feel free to contact me:
Written by Sven Roering, Total Wealth Management
Partner & Member of the Investment Committee