Saving in dollars

USD dollars earns no interest in banks. Convert to VND get interest, then convert back to USD when you leave.

@colinoscapee
And what about inflation?

Not sure where inflation fits in to term deposits.

Many here do not know how the term inflation relates to deposits. The simple answer is you lose purchasing power because you deposited funds are worth less when you withdraw them then when you deposited them. Hence the high yields that some think they get here on deposits or bonds.

Thats why you get a term deposit with a set interest. Inflation can go up or down and will only have an effect when you reinvest.

Ok thanks.

The VND is somewhat pegged to the USD, but occasionally the VN govt deflates it a little. Looks like in the last 12 months, the VND has lost 1.5% against the dollar. So, if you are getting 6.5% interest on VND in the bank, then your net gain is 5% with devaluation. Or something like that (also currency conversion fees). I don't know about VN inflation vs US inflation, more stuff to factor in.

Chart

Many places now offer 8%. If you dont put it in a term deposit you earn squat, therefore you would be even further behind. This is only suitable for long term expats, short term leave your money at home.

I've been told that many vietnamese, who don't want to put their money in banks and long term deposits, they buy gold and stash it somewhere. Gold value is rather stable.

Asians love gold, but it can fluctuate at times. Gold in VN is a higher cost than the world spot price.

@colinoscope and Gobot
  Your fooling yourselves guys. The actual inflation rate so far for 2017 is 5.22%. Now plug that into your 6.5% yield. Sure Colinoscope you can get a term deposit and get your nickers eaten even worse. And yes, the dong is pegged to the dollar. But PPP is not, nor is it pegged to real inflation. At the huge true Yield using GoBot figures you have a  return of 1.28 %. But remember you can not get to your term deposit. But inflation's not necessarily constrained during that time you are locked into a term deposit. So, for example what happens if inflation goes fro 5.22% to 7%. You git zilch to show for it. Don't forget the bag of rice you bought for the equivalent of a dollar now cost $1.0522.
I love these dyscsuuon with the money saver on here. I have a friend who is just beside himself with the high rates of returns he can get on bank deposits here in VN. Indeed, he is trying to get all his Western friends to invest their money and get rich like him. I try to tell him you need to better understand money , before you become a financial advisor or you are going to have some mighty pissed off friends.
There is a reason the world is not rushing to invest in VN bonds or CD's. Once you gents figure it out you may understand why. Happy investing!!!

Geez, what a rant. Nowhere have I said to place all your funds here in Vietnem. Im talking from the point of being a long term expat that keeps his savings that I have earned legally in VN placed in a term deposit. Its not rocket science, but maybe it is for you.

Maybe you didnt understand the OP. Here it is again.


We have been living in HCMC  just over 9 months and want some advice in terms of converting dong into dollars and best saving options out there. Not looking at investing but a savings option only in dollars.

I was not responding to the OP, and I believe I directed my response to Colinoscopes comments, albeit in an indirect way. I should have addressed it directly to him which would have made my comments clearer I suppose. Where he said " not sure where inflation fits...." It surely does if you drop your money off at the bank for safe keeping.

Has no relevance at all, troi oi. My replies where in relation to term deposits, from money earned whilst in country, which is what I think the OP is all about. There was no mention of Bonds or CD's, that was your assumption.

Anyway, I have money in the bank in a term deposit from money I have earnt here, if I keep it at home I earn squat. Maybe that is your way of doing things, me I prefer the 8% interest I receive and no inflation attached to it.

Diazo wrote:

@colinoscope and Gobot
  Your fooling yourselves guys.... Once you gents figure it out you may understand why. Happy investing!!!

I'm rich. Some people would say I'm very, very, very rich. I have people, the best people in the world, managing my money. My investments are amazing. I hear that all the time. Believe me.

Keep thinking your earning 8%. Never ends. But those who do not understand money are always the ones that suffer the most. And you sure can not educate them.

It certainly is not rocket science but the rocket has certainly flown over a few folks heads.  How you earned the money or where you earned the money has nothing to do with the simple facts of inflation and return on investment. And that ain't rocket science. If you losing purchasing power your losing. Does not matter how or where you got the money to lose. But never mind, it is obviously many 1000 of feet above your head.

Inflation will be worse if you received nothing on your money.1 billion in vnd in the bank gives you 80 million interest. 1 billion sitting in the cupboard gives you zero, inflation will affect both. I know I which one makes more sense to anyone who is logical.

I see my account increase each year, so yes I must be stupid.

Yes, in relative terms you feel you are making money because it says you have more money at the end of the year. But the trick is to put it in something that will keep you ahead of inflation as much as possible. Indeed, if the current rates stated in this thread, I think it was from Gobot you will be ahead of inflation a little. But when compared to other investment vehicles you could stay further ahead. That is why we stay abreast of all
Investment vehicles to determine where best to put our money long term. If one had a choice, putting it in a more stable country would be better. Many expats have that choice. Many locals do not.
You could put 1 billion VND ( or any currency ) under your mattress as well. But if you have 8% inflation when you take it out to buy anything you will have lost 8%.
But as I said before, with the current rate of return stated by Gobot is correct your real rate of return is 1.25%. And in some cases if you have a major purchae planned you might be better off buying today rather than tomorrow. If you had deposited you money
in some time deposit just before inflation went through the roof in 2011 here and it reached something like 14% and your time deposit was still earning what the 7.99% you were getting when you deposited it 2 years prior you would not be to happy with a 6% loss.
Enjoyed chatting with you all on the subject. Again  happy investing and many hapy returns to you all. But I am out of this circular conversation.

Given what's happening in the US fiscally and monetarily, i would also add my humble voice against saving in USD. And USD is so dang high, which is not a good buy point.

And VND interest rates vs. foreseeable inflation and overall banking system also seems risky to me.

My fiat savings bet Is on the major fiat that seems undervalued, or at least not likely to be inflated, as USD and VND are likely to be.

Right now of the undervalued, the thing to get seems to be the Pound Sterling near 30 year lows against the USD.

Among not likely to inflate relative USD seems to be SGD and CHF, where the governments are fiscally more reasonable, particularly  don't need to inflate to support ruinous military adventures.

Lots of criticism, no advice. That's never a good combination.

If you have enough money you might look into offshore banking.

I last looked into that about 10 years ago. Lots of options for your money but you need about 10K to get started. Probably USD or equivalent.

Also judging by job adverts on here and other sites, you should be able to find an English speaking financial advisor. I don't know how tightly they are regulated here. That could be important.

Cash, land, gold, paper. IIRC those are the pillars of financial wealth.
Risky investments (paper) should be inversely proportional to your age. Older-less risk. That used to mean currency and government bonds (less risk) vs stocks (more risk).

Maybe someone with more knowledge than I could fill in the blanks or fact check.

I am trying to find the criticism the gentleman mentions.

I was in Tay Ninh province for a family visit this year. I wanted to open a savings account so I could wire money ahead of my next visit. My Tay Ninh banker suggested we put the account my vietnamese wife's name that way I will pay no tax on the savings account interest. As a forienger you will be subjected to a tax on your investment interest. Unless your a Vietnamese with an id card

You pay tax on interest over 9 million a month, it may have changed as that was a few years ago.

I mainly wire money before we come to Vietnam.  No customs hassles and no chance to get ripped off carrying large sums of money in my daily travels in Vietnam. I as of yet I dont need to invest money in Vietnam, my investments in Canada are better then the return I would get in Vietnam at this point anyways
We just contribute to our families needs and the local economy.
The next time I come to Vietnam I will inquire further on exact tax issues for investment accounts. I do know  USD accounts pay very little in interests rate returns.
VND term accounts pay much better.

Many expats do NOT have the choice of offshore invesments as most of them work illegally (as tourists) as teachers and are unable to transfer VND out of Vietnam.

No real savings options in dollars unless you're working remotely and payment is already deposited to your U.S. account.

If this money is from working illegally then you're SOL unless you plan on carrying $5000 (max) through Vietnam customs back to your home country.

@vaneric
  I realize you are not investing in USD or VND. But just a word of caution before you go down that path if your believe your statement is reflective of true yield when  you say "USD accounts pay very little interest rate return..." "VND term accounts pay much better".
  It never matters what stated yield is. You must take stated yield then subtract the rate of inflation, then you get true yield. On the surface of it your right VND looks better at what, maybe 6% interest, but if inflation is 5% then your true yield is one percent.  Plus given they both had the same true yield you must factor in currency risk. The $ being the currency of international settlements ( for now anyway) it will in most cases be the least amount of risk. So when you see stated interest rate. be careful. There are some banks in the world paying 48% or better interest the last time I looked. But there is no rush of foreign money to invest in such great rate of return.
  Just in general terms the higher the interest rate the higher the risk. We can but stocks in the US that yield 12% out more. But the risk is quite high. Meaning you could lose it all as bond holder are paid first before stock holders if the company goes under. That is another story.
But I try to point out every time I see these statements in the forum the true facts. Many may take what you say to heart and put their money in the high yielding accounts here. And I have many friends that do. The problem with inflation is it steals your money very silently. You have little clue your purchasing power is being eroded. Good luck though.

My savings are in a brokerage account in America and include securities. Our SSI, Army retirement etc. retirement checks go to a non interest checking account in America and is transferred as needed to a non interest account in Viet Nam. This was set up around 10 years ago and is reliable.

Considering the complexity of reporting interest income and finding alternative providers, making a little interest money doesn't seem worth the effort.

If you follow the opinions opined here so often you better head to Argentina and deposit your funds there. Using the rule of 72 you would double your money in just over 3 short years with the 22.2% return. Please please don't move your money folks, I am just trying to illustrate
a point.

Diazo wrote:

If you follow the opinions opined here so often you better head to Argentina and deposit your funds there. Using the rule of 72 you would double your money in just over 3 short years with the 22.2% return. Please please don't move your money folks, I am just trying to illustrate
a point.

Venezuela is even better. Your money can double in a few days. Of corse the value of the money drops much faster.

My point exactly. Indeed there are some where it is 800%. Better jump on that one as it is better than the term deposits in VN.

But the good thing is inflation is better than deflation. Very difficult to turn around the later.

Diazo wrote:

But the good thing is inflation is better than deflation. Very difficult to turn around the later.

Right. But the things that I could buy in the 1960s seem to mostly be 10x as much. Note, some things like TVs and other electronics are much cheaper these days.

Yes, they call that technology advancements. I many cases labor is far cheaper for a manufacture also, because it has been eliminated with automation. Not quite an apples to apples comparison to compare inflation or yield to technology advancement that bring the cost of good and services down like with a TV.

All these smart guys telling everyone what not to do while insinuating that they have all the answers.

OP: Where can a thirsty guy get a can of coke around here?

Reply: OOOOOh, tricky question. As someone who has a huge cache of coke you should trust me when I say that only a fool would buy from a nearby store. Trust me. I'm the coke king.

OP: Uh, ok, so where would you advise me to buy a coke?

Reply: Not at the nearest retailer. I know, I'm the coke king.

OP: So that means....?

Reply: crickets.

This thread is hilarious.

We can't tell you where to buy that coke because (link is moderated)..LOL