Time Deposits - Some Questions

[yankee-expat]

I can't get a straight answer from my bankers due to the language barrier so maybe someone here will have the answer.

I opened an account at Thanachart Bank. I opened a savings account, put 1000 baht into it and left it at that.

I deposited 50,000 baht in a 12 month time deposit paying 4+ percent interest. They gave me a new passbook with the time deposit in it.

I now have two passbooks at Thanachart.

If I leave the money in the account for 12 months, I earn 4 + percent interest on the amount.

What happens if I withdraw early? My thinking was that I lose all the interest but can get my money at any time. If that is true, then why put 500,000 baht and tie it up for 12 months, put it in increments so if I need the money, I can take it out early but leave the other multiples of say 50,000 baht alone.

I have 500,000 baht, in 10 50,000 baht 12 month deposits.

I take one of the 50,000 baht for whatever reason, that leaves me earning interest on the other 450,000 baht with no penalty.

Am I correct.

Second question:

Is the interest typically compound or simple?

[solo siam]

I thought only Thais actually accumulaed interest on any savings accounts.

[ArranP]

I can't get a straight answer from my bankers due to the language barrier so maybe someone here will have the answer.

I opened an account at Thanachart Bank. I opened a savings account, put 1000 baht into it and left it at that.

I deposited 50,000 baht in a 12 month time deposit paying 4+ percent interest. They gave me a new passbook with the time deposit in it.

I now have two passbooks at Thanachart.

If I leave the money in the account for 12 months, I earn 4 + percent interest on the amount.

What happens if I withdraw early? My thinking was that I lose all the interest but can get my money at any time. If that is true, then why put 500,000 baht and tie it up for 12 months, put it in increments so if I need the money, I can take it out early but leave the other multiples of say 50,000 baht alone.

I have 500,000 baht, in 10 50,000 baht 12 month deposits.

I take one of the 50,000 baht for whatever reason, that leaves me earning interest on the other 450,000 baht with no penalty.

Am I correct.

Second question:

Is the interest typically compound or simple?

It usually means you will loose the interest for only the capital withdrawn.

ie. if you deposit 100,000 baht in an account and withdraw half of it ie 50,000 baht, you would only stand to loose half the interest, some accounts apply a flat penalty also, I know nothing about this particular bank so its best to try to work thru it with them.

[ArranP]

I can't get a straight answer from my bankers due to the language barrier so maybe someone here will have the answer.

I opened an account at Thanachart Bank. I opened a savings account, put 1000 baht into it and left it at that.

I deposited 50,000 baht in a 12 month time deposit paying 4+ percent interest. They gave me a new passbook with the time deposit in it.

I now have two passbooks at Thanachart.

If I leave the money in the account for 12 months, I earn 4 + percent interest on the amount.

What happens if I withdraw early? My thinking was that I lose all the interest but can get my money at any time. If that is true, then why put 500,000 baht and tie it up for 12 months, put it in increments so if I need the money, I can take it out early but leave the other multiples of say 50,000 baht alone.

I have 500,000 baht, in 10 50,000 baht 12 month deposits.

I take one of the 50,000 baht for whatever reason, that leaves me earning interest on the other 450,000 baht with no penalty.

Am I correct.

Second question:

Is the interest typically compound or simple?

for compound interest, you will need to ask them for their AER figure, not sure they have this in thailand, I'm speaking from UK deposit accounts.

interest is either paid anually or monthly, if the interest is paid into the account itself then probably it will included in the interest calculation for the next term/period ie. compound interest.

[yankee-expat]

Thanachart Rates

2.5 percent is a lot better on a normal savings account than .075 percent given by BB.

[Wekhin]

Time deposit is treated as per transaction. Withdrawal of a transaction does not affect the others. You may get 0% interest or some interest from early withdrawal. Penalties vary from bank to bank. High interest accounts normally are subject to high penalties. The contract that you signed when opening the account must mention about penalties. You have to check with your bank. Normally, you should get some interest from early withdrawal but it will be less than deposits of the same maturity. For example, withdrawal in less than 3 months will get lower rate than Savings account rate; withdrawal between 3-6 months will get lower rate than 3-month time deposit; and so on.

The interest is compounded.

[topfield]

I can't get a straight answer from my bankers due to the language barrier so maybe someone here will have the answer.

I opened an account at Thanachart Bank. I opened a savings account, put 1000 baht into it and left it at that.

I deposited 50,000 baht in a 12 month time deposit paying 4+ percent interest. They gave me a new passbook with the time deposit in it.

I now have two passbooks at Thanachart.

If I leave the money in the account for 12 months, I earn 4 + percent interest on the amount.

What happens if I withdraw early? My thinking was that I lose all the interest but can get my money at any time. If that is true, then why put 500,000 baht and tie it up for 12 months, put it in increments so if I need the money, I can take it out early but leave the other multiples of say 50,000 baht alone.

I have 500,000 baht, in 10 50,000 baht 12 month deposits.

I take one of the 50,000 baht for whatever reason, that leaves me earning interest on the other 450,000 baht with no penalty.

Am I correct.

Second question:

Is the interest typically compound or simple?

Dear Friend,

The answer depends on the rules of the account which you agreed to accept when the a/c was opened.

The bank will provide you with those rules and if they are a good bank will provide these in English also.

The Housing Bank have their a/c rules (in Thai) printed at the front of the passbook.

[jbaldwin]

I understand that the normal policy with Thai banks and certainly the policy that Bangkok Bank uses is:

Withdraw within 3 months - no interest paid but no further penellty

Withdraw 3 month to end of term - interest reduced to that on saving accounts (normally 0.75%)

Generally partial withdrawal are not allow

Yes you can have a number of separate deposit and difference maturities dates and take money out penality free when each matures.