Distinguish between savings deposits and term deposits? Which deposit method should be used?

Choosing the form of depositing money at the bank is a concern of many customers who need to manage their personal finances. Among them,savings deposits and term deposits are two popular products, both providing safety for capital and helping customers enjoy stable interest rates. Understanding the characteristics, advantages and disadvantages of each form will help each individual and organization make the decision that best suits their financial needs.

1. Similarities between savings deposits and term deposits

Savings deposits and term deposits have many similarities in legal nature as well as purpose of use. First of all, in concept, both are amounts of money that customers deposit in credit institutions with the principle of full repayment of principal and interest according to the agreement. According to the provisions of Circular 48/2018/TT-NHNN. Savings deposits include two types: term deposits and non-term deposits. Therefore, it can be affirmed that term deposits are essentially a specific form of savings deposits, the only difference being that they have a clearly defined term.

Regarding the subject of application, the law stipulates that individual customers are the basic subjects of both forms of deposits. Depositors must meet the conditions of civil capacity as prescribed by the Civil Code. In addition, in the case of term deposits according to Circular 49/2018/TT-NHNN, the subject is also extended to institutional customers, that is, businesses, agencies, and units that need to deposit money at credit institutions.

In terms of purpose, both savings deposits and term deposits have a dual meaning for customers and credit institutions. For customers, this is a form of safe money storage, while also providing income from interest. In many cases, deposits can also be used as collateral when customers need to borrow capital. For credit institutions, mobilizing deposits helps supplement capital sources to serve credit activities, investment and legal business.

2. Compare savings deposits and term deposits

Here is a comparison table of the basic differences between savings deposits and term deposits:

2.1. Target customers

Savings deposits are mainly applied to individual customers, i.e. Vietnamese citizens or foreigners legally residing in Vietnam, meeting the conditions of age and civil capacity. Meanwhile, term deposits have a wider scope of subjects, including both individual customers and institutional customers such as businesses, agencies, and units, helping banks diversify their mobilized capital sources.

2.2. Deposit classification and terms

Savings deposits are divided into two basic groups: term deposits and non-term deposits. Of which, term deposits often have many options such as receiving interest in advance, periodically or at the end of the term, while non-term deposits allow flexible withdrawals but have low interest rates.

Term deposits are a specific form of savings, focusing only on fixed terms specified by the bank such as 1 month, 3 months, 6 months, 12 months or longer.

2.3. Management form

For savings deposits, banks often manage through savings books, savings cards or online savings accounts. These are documents showing the customer's ownership of the deposit.

For term deposits, in addition to the book or account, customers must also sign a contract/agreement document/bank deposit request formwith the recorded contenton terms, interest rates and related conditions, to ensure clarity on the rights and obligations of the parties.

2.4. Flexibility in withdrawal and ability to close early

Non-term savings deposits allow customers to withdraw money at any time without any restrictions, but the interest rate is very low. With term savings, if withdrawn before maturity, customers usually only receive non-term interest, which is much lower than the initial interest rate.

2.5. Interest rate

Interest rates are the criteria that clearly show the difference between the two forms of deposits. With non-term savings deposits, interest rates are often very low, only symbolic. Meanwhile, term savings have higher interest rates but are still often lower than term deposits under separate contracts.

As of September 2025 update, the average market interest rate for a 12-month term ranges from 3.7% to 5.8%/year. At SeABank, interested customers can directly contact the nearest transaction branch to be updated with the most competitive interest rates on the market.

2.6. Risk level

In terms of risk, both savings deposits and term deposits are considered to be highly safe financial products. Both are subject to regulation by the Law on Credit Institutions 2024 and Law on Deposit Insurance 2012, which means that customers will have their deposits insured within the limit prescribed by law (currently up to 125 million VND/person/credit institution). Therefore, the risk of losing principal is very low, except in cases where customers violate the law or use fake documents.

The difference is that with non-term savings deposits, the risk mainly lies in the risk of opportunity due to the very low interest rate, making it difficult for customers to achieve the accumulation effect. Meanwhile, term deposits have the potential risk of liquidity: if customers need to withdraw before maturity, the interest rate will be sharply reduced to the non-term interest rate, leading to loss of financial benefits.

3. Should I choose savings deposits or term deposits?

Savings depositsSuitable for those who need flexibility in using money. With non-term savings, customers can withdraw money at any time without being bound by a term, making it easy to cope with unexpected spending needs. In addition, term savings with many options for deposit time are also suitable for those who want to optimize profits from idle money in the short term, but still maintain the ability to rotate capital flexibly.

Term deposits is a suitable choice for those who have idle financial resources and want to increase their assets safely. Because the interest rate on term deposits is often significantly higher than that on non-term savings, customers can ensure a stable profit if they commit to depositing for a sufficient period of time. This form is especially suitable for those who do not need to use the money for a certain period of time, such as saving to buy a house, long-term investment, or preparing for future financial plans.

4. Savings and term deposits at SeABank

SeABank currently offers a variety of savings and term deposit products with many terms, flexible transaction forms (at the counter or online) and the best interest rates on the market today. Customers can easily choose the solution that best suits their financial needs.

When choosing a deposit product at SeABank, customers can transact in two ways: at the counter and online. With the counter method, customers need to go directly to a SeABank branch or transaction office to open a book or sign a deposit contract. Meanwhile, online deposits are done entirely via the SeAMobile application or the SeANet website, helping to save time and be convenient 24/7.

In terms of terms, both forms offer a variety of options from short term (1 month) to long term (36 months), suitable for both flexible needs and long-term accumulation. In terms of interest rates, online deposits often have higher incentives than counter deposits in many terms, such as 6 months: online 4.50%/year compared to counter 3.75%/year, or 12 months: online 5.00%/year compared to counter 4.50%/year. In particular, for long terms from 15 to 36 months, both forms apply the most attractive interest rates, up to 5.45%/year.

Note: The savings interest rates in the article are for reference only and may vary depending on time and bank.

(*) Interest rates are updated as of September 7, 2025. Customers should check directly with the bank before depositing to know the exact interest rate and accompanying incentives.

In general,savings deposits and term deposits are all safe financial solutions, protected by law and suitable for many different customer groups. While savings deposits meet the need for flexibility in capital use, term deposits are optimal for long-term accumulation goals with higher interest rates. Depending on the plan and financial capacity, customers can consider choosing or combining both forms to ensure safety and maximize benefits.