What is a Savings Deposit?
A savings deposit is when an individual or organization deposits their idle funds into a bank with the purpose of earning periodic interest based on the fixed interest rate determined by the bank.
The most traditional form of savings deposit is done at a bank branch where a savings passbook is issued as proof of the deposit made by the customer for a certain period of time and with a specific interest rate.
To withdraw the money, customers need to bring the passbook to the branch along with their identification documents for the necessary paperwork.
Throughout history, depositing money in a bank has always been a safe investment option. Although it does not provide high returns like other investment options such as the stock market, real estate, or business ventures, it offers stability and security with minimum risk or almost none at all.
Based on their credibility, banks or financial institutions accumulate funds from people’s savings deposits, and then use those funds to lend or invest in various sectors to contribute to the economic development.
To ensure that depositors don’t incur any losses, the interest rate for savings deposits is always higher than the annual inflation rate, guaranteeing profit.
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How much interest can you earn from a deposit of 1 million, 10 million, 100 million each month?
Currently, most banks allow customers to make fixed-term deposits starting from 1 million VND. With this policy, customers can easily participate in depositing money with different benefits. Additionally, the amount of profit customers receive depends on the deposited amount, the bank, and the term of the deposit.
The interest earned from a 1 million VND deposit for one month can be calculated as follows:
Interest = Deposit amount x Interest rate (%/year) x Number of days deposited/365
Where:
Deposit amount: The amount of money you want to deposit.
Interest rate: The interest rate offered by the bank, which can be short-term, 1 month, 3 months, 6 months, etc.
Number of days deposited: The actual number of days the money is deposited since there could be cases of early or late withdrawal.
For example, the current 1-month fixed-term savings interest rate at Vietcombank is 1.7% per year. Using the above formula, when depositing 1 million VND, customers will earn a monthly interest of 1,397 VND; for 10 million VND, the interest will be 13,972 VND per month, and for 100 million VND, the interest will be 139,726 VND per month.
Alternatively, for Techcombank, their 1-month fixed-term savings interest rate is currently 2.5% per year. So, when depositing 1 million VND, customers will earn a monthly interest of 2,054 VND; for 10 million VND, the interest will be 20,547 VND per month, and for 100 million VND, the interest will be 205,479 VND per month.
