Opening a saving account in Cambodia?

[Brunolem]

Cambodian banks and microfinance organizations offer much better rates than Thai banks, on average 5 or 6% higher...at least on paper.

 

Yet, we don't see all the money flowing from Thailand to the Cambodian border...thus there may be a downside, or is there?

 

Do any TVF members have some experience with such an investment?

Is it worth it, and if not why?

[Halfaboy]

I think the biggest downside is the spread between the buy and sell rates. Also the exchange rate may not be constant (although I could not get info on this). 

[Henryford]

Yes the money flows from Thailand to Cambodia but never comes back.

[Brunolem]

9 minutes ago, Henryford said:

Yes the money flows from Thailand to Cambodia but never comes back.

Can you elaborate?

[Brunolem]

1 hour ago, Halfaboy said:

I think the biggest downside is the spread between the buy and sell rates. Also the exchange rate may not be constant (although I could not get info on this). 

It is possible to open an account in THB in Cambodia, therefore there are no currency exchange costs...

[Halfaboy]

That's good info. I was not aware of that.

Thanks....

[topt]

1 hour ago, Brunolem said:

It is possible to open an account in THB in Cambodia, therefore there are no currency exchange costs...

Are you asking or making a statement?

My understanding is you cannot directly transfer Thai baht out of Thailand without first changing it into another currency. The only way would be to hand carry cash to which there are limits........

 

This has been postulated before so maybe see if a search brings up any older threads with relevant info.

[Brunolem]

3 hours ago, topt said:

Are you asking or making a statement?

My understanding is you cannot directly transfer Thai baht out of Thailand without first changing it into another currency. The only way would be to hand carry cash to which there are limits........

 

This has been postulated before so maybe see if a search brings up any older threads with relevant info.

It is a sure thing that you can open an account in THB, or USD, in Cambodia.

 

The currency transfer is another issue.

The usual process is that the money leaves the country, whichever it is, denominated in the local currency, and is converted into the destination country's currency upon arrival.

Thus, if someone transfers, say, 100,000 baht from Thailand to Cambodia, the money should either be converted into riels upon arriving at destination, if the account has been opened in riel, or not converted if the account has been opened in THB.

 

Yet, the latter paragraph would need to be confirmed by someone who has actually done such a transfer...

[jackdd]

If i look here: https://www.canadiabank.com.kh/en/fixed_deposit_account.aspx

USD seems to give a higher interest rate so if you want to do this you should probably just go for this.

[HLover]

22 hours ago, jackdd said:

If i look here: https://www.canadiabank.com.kh/en/fixed_deposit_account.aspx

USD seems to give a higher interest rate so if you want to do this you should probably just go for this.

If he chooses Riel, then exchanges for USD at the end of the term, would that be wise?

[Brunolem]

1 hour ago, HLover said:

If he chooses Riel, then exchanges for USD at the end of the term, would that be wise?

Maybe, maybe not...both currencies fluctuate...difficult to predict where they will be, relative to each other, a year or two from now.

 

Having said that, I am a bit surprised by the lack of input from members who might have actually done such a financial operation.

 

After all, this opportunity has been here for many many years, and so have many TVF members.

 

The fact that, apparently, no one has seized this opportunity seems to confirm that there is a downside in moving money from Thailand to Cambodia, as I suggested in the opening post...

[3421abc]

I have savings account in Cambodia, some pay as high as 8% a year for a 3 yr CD in Riel, in USD is slightly less maybe 7%.

 

Exchange rates in Cambodia are great, way better than Thailand. Most places you can exchange at the spot price w no markups.

 

You can open accounts at Canadia Bank, Cambodia Post Bank, ABA bank and Sacombank w a tourist visa. I did about 1 yr ago.

 

ABA and Canadia are partly owned and 1 of them is 100% owned by Canadians.

 

There is another bank that you can have an account in Euros as well but I can't recall the name.

 

Most expats bank w ABA or ANZ but ANZ requires a work permit.

 

I like ABA because you can bank online and wire funds from your computer at home, no need to go to branch. *you need to order a card that gives you codes to do wire from home.

 

Another thing I like is that you can wire funds out of Cambodia without all the hassle the Thais give you here.

 

[Brunolem]

4 minutes ago, 3421abc said:

I have savings account in Cambodia, some pay as high as 8% a year for a 3 yr CD in Riel, in USD is slightly less maybe 7%.

 

Exchange rates in Cambodia are great, way better than Thailand. Most places you can exchange at the spot price w no markups.

 

You can open accounts at Canadia Bank, Cambodia Post Bank, ABA bank and Sacombank w a tourist visa. I did about 1 yr ago.

 

ABA and Canadia are partly owned and 1 of them is 100% owned by Canadians.

 

There is another bank that you can have an account in Euros as well but I can't recall the name.

 

Most expats bank w ABA or ANZ but ANZ requires a work permit.

 

I like ABA because you can bank online and wire funds from your computer at home, no need to go to branch. *you need to order a card that gives you codes to do wire from home.

 

Another thing I like is that you can wire funds out of Cambodia without all the hassle the Thais give you here.

 

Thanks...that's very interesting information.

 

Have you actually wired funds out of Cambodia?

[3421abc]

4 minutes ago, Brunolem said:

Thanks...that's very interesting information.

 

Have you actually wired funds out of Cambodia?

Yes. You just go to the branch and request it. Now I have this card with codes on it from ABA bank so I just do from my computer.

I did a wire w Canadia, cheaper than ABA in terms of fees.

I do everyday banking w Canadia, and ABA I use for wire transfers when I am not in Cambodia. They both also have phone apps to check balances and do some transfers.

[topt]

23 minutes ago, 3421abc said:

Yes. You just go to the branch and request it. Now I have this card with codes on it from ABA bank so I just do from my computer.

I did a wire w Canadia, cheaper than ABA in terms of fees.

I do everyday banking w Canadia, and ABA I use for wire transfers when I am not in Cambodia. They both also have phone apps to check balances and do some transfers.

So to be clear you need to make at least one visit to open the account - presumably you can request the allowance of outward transfers via internet at the same time?

Can you wire in the opening amount after opening or do you need to deposit cash?

Can you give an idea of costs to be aware of - Eg for depositing $US and cost of receiving TTs and sending out?

Thanks

[Brunolem]

25 minutes ago, topt said:

So to be clear you need to make at least one visit to open the account - presumably you can request the allowance of outward transfers via internet at the same time?

Can you wire in the opening amount after opening or do you need to deposit cash?

Can you give an idea of costs to be aware of - Eg for depositing $US and cost of receiving TTs and sending out?

Thanks

I am also interested in the answers to these questions...

 

In short, according to your experience, 3421 abc, what is the net annual interest one can expect to get, after deduction of taxes, bank and transfer fees?

[jerry921]

I really like 7%, but I also like to understand all the risks, so pardon me for all these tedious questions....

 

I read that (like in the western countries) Thai bank accounts are guaranteed by the government in case of bank failure, up to a certain limit (I forget the limit, and anyway in the thread I read people were arguing about it, so, whatever, up to some limit).

 

Is there something similar with Cambodian banks? If so, what is the limit?

 

And do these government backing schemes cover foreign depositors and not just Thai/Cambodian nationals?

 

And do these government backing schemes apply even when the account is a foreign currency deposit account?

 

And a final issue - usually the backing schemes are insurance pools, originally set up by the government, but funded by a levy on the banks based on the amount of deposits insured. Are the Thai (and possibly Cambodian) schemes like that?  In a severe downturn, with many bank failures, such insurance pools can go dry. In many countries, when this has happened, the government has bailed out the insurance pool with taxpayer money. But it doesn't always work out that nicely for depositors (you can google "bail-in"). So, have the deposit insurance pools in Thailand or Cambodia ever gone dry, and what happened when they did?

 

 

[CH1961]

1 hour ago, jerry921 said:

I really like 7%, but I also like to understand all the risks, so pardon me for all these tedious questions....

 

I read that (like in the western countries) Thai bank accounts are guaranteed by the government in case of bank failure, up to a certain limit (I forget the limit, and anyway in the thread I read people were arguing about it, so, whatever, up to some limit).

 

Is there something similar with Cambodian banks? If so, what is the limit?

 

And do these government backing schemes cover foreign depositors and not just Thai/Cambodian nationals?

 

And do these government backing schemes apply even when the account is a foreign currency deposit account?

 

And a final issue - usually the backing schemes are insurance pools, originally set up by the government, but funded by a levy on the banks based on the amount of deposits insured. Are the Thai (and possibly Cambodian) schemes like that?  In a severe downturn, with many bank failures, such insurance pools can go dry. In many countries, when this has happened, the government has bailed out the insurance pool with taxpayer money. But it doesn't always work out that nicely for depositors (you can google "bail-in"). So, have the deposit insurance pools in Thailand or Cambodia ever gone dry, and what happened when they did?

 

 

You want high interest rates without any risks ??? Sorry, how old are you ?

[topt]

Quick search shows ABA bank as mentioned by a previous poster.  Minimum transfer fees charged by ABA $15 out and $10 in - depending on which currency you send......Also some sort of $25 charge for a security item if you are doing online transfers without a local Cambo no.

It mentions "any government withholding taxes" in the Ts and Cs without specifying if there are any.

https://www.ababank.com/fixed-deposit/

Currency	USD	KHR
Minimum initial deposit	100	400,000
Interest rate (p.a.)*	Term Interest at Maturity Monthly Interest USD KHR USD KHR 1 month 1.25% 2.25% N/A N/A 3 months 2.50% 4.00% 2.25% 3.75% 6 months 3.50% 4.75% 3.25% 4.50% 12 months 5.00% 6.25% 4.75% 6.00% 24 months 5.25% N/A 5.00% N/A 36 months 5.50% N/A 5.25% N

[topt]

4 hours ago, jerry921 said:

Is there something similar with Cambodian banks?

It does not look like it. 2 links here for most recent articles I could find -

http://www.phnompenhpost.com/supplements/deposit-protection-scheme-edges-closer-reality

http://www.phnompenhpost.com/business/bank-deposit-insurance-proposed-riel-security

[simoh1490]

On 18/02/2018 at 4:28 PM, Brunolem said:

It is a sure thing that you can open an account in THB, or USD, in Cambodia.

 

The currency transfer is another issue.

The usual process is that the money leaves the country, whichever it is, denominated in the local currency, and is converted into the destination country's currency upon arrival.

Thus, if someone transfers, say, 100,000 baht from Thailand to Cambodia, the money should either be converted into riels upon arriving at destination, if the account has been opened in riel, or not converted if the account has been opened in THB.

 

Yet, the latter paragraph would need to be confirmed by someone who has actually done such a transfer...

A few points:

 

The interest rate on THB in Cambodia is not going to be greater than what the banks offer in Thailand, why would it be, THB is a boutique currency that is not in demand globally!

 

Yes you can open a USD account in Cambodia but remember the country is way behind Thailand in terms of development hence there is no bank deposit protection system hence if the bank fails, you could easily lose your funds.

 

Yes the interest rate on USD is higher in Cambodia than in many other countries, simply, the banks and the country are trying to buy deposits and that in itself is a risk.

 

Political, liquidity and exchange rate risk are issues to consider in Cambodia, especially if Cambodia decides one day to implement currency controls, just as Thailand did.

 

The maximum amount of Baht you can transfer to Cambodia is 50,000 baht. https://www.bot.or.th/English/FinancialMarkets/ForeignExchangeRegulations/FXRegulation/Pages/default.aspx

 

 

[Brunolem]

13 minutes ago, topt said:

Quick search shows ABA bank as mentioned by a previous poster.  Minimum transfer fees charged by ABA $15 out and $10 in - depending on which currency you send......Also some sort of $25 charge for a security item if you are doing online transfers without a local Cambo no.

It mentions "any government withholding taxes" in the Ts and Cs without specifying if there are any.

https://www.ababank.com/fixed-deposit/

Currency	USD	KHR
Minimum initial deposit	100	400,000
Interest rate (p.a.)*	Term Interest at Maturity Monthly Interest USD KHR USD KHR 1 month 1.25% 2.25% N/A N/A 3 months 2.50% 4.00% 2.25% 3.75% 6 months 3.50% 4.75% 3.25% 4.50% 12 months 5.00% 6.25% 4.75% 6.00% 24 months 5.25% N/A 5.00% N/A 36 months 5.50% N/A 5.25% N

As far as I know there is a 14% tax applicable to non-residents.

[simoh1490]

Let me get this straight, you want to invest in a Cambodian savings account in KHR, just to get the 6.25% interest rate? That being the case your risk is very high, not only will exchange rates going in, taxes on exit, exchange rate on exit plus currency exchange rate risk inbetween wipe out your profit but you also have layers of bank and political risk to contend with. You sound like a poster a few days ago who has been living off the interest of his Vietnamese savings deposits for years, only to find out that the currency had lost 18% of its value as a result of exchange rate differences!

[Brunolem]

3 minutes ago, simoh1490 said:

 

Yes the interest rate on USD is higher in Cambodia than in many other countries, simply, the banks and the country are trying to buy deposits and that in itself is a risk.

 

Political, liquidity and exchange rate risk are issues to consider in Cambodia, especially if Cambodia decides one day to implement currency controls, just as Thailand did.

 

The maximum amount of Baht you can transfer to Cambodia is 50,000 baht. https://www.bot.or.th/English/FinancialMarkets/ForeignExchangeRegulations/FXRegulation/Pages/default.aspx

 

 

I can't find the text related to the 50,000 baht limitation???

 

Actually, Cambodian banks are not really encouraging people to make deposits in USD or THB, since they offer higher interest rates for deposits in Riels, the local currency.

 

They just offer this opportunity for foreigners who don't want to bear the risks and costs associated with currency exchange.

 

[simoh1490]

1 minute ago, Brunolem said:

I can't find the text related to the 50,000 baht limitation???

 

Actually, Cambodian banks are not really encouraging people to make deposits in USD or THB, since they offer higher interest rates for deposits in Riels, the local currency.

 

They just offer this opportunity for foreigners who don't want to bear the risks and costs associated with currency exchange.

 

Does your mom know you're not in your room!

 

"There is no limit on the amount of Thai baht bank notes that may be brought into the country. A person traveling to Vietnam, the People's Republic of China (only Yunnan province) and Thailand's bordering countries is allowed to take out  up to THB 2,000,000. A person traveling to other countries is allowed up to THB 50,000".

[Brunolem]

1 minute ago, simoh1490 said:

Let me get this straight, you want to invest in a Cambodian savings account in KHR, just to get the 6.25% interest rate? That being the case your risk is very high, not only will exchange rates going in, taxes on exit, exchange rate on exit plus currency exchange rate risk inbetween wipe out your profit but you also have layers of bank and political risk to contend with. You sound like a poster a few days ago who has been living off the interest of his Vietnamese savings deposits for years, only to find out that the currency had lost 18% of its value as a result of exchange rate differences!

As has been stated by many posters above, there is NO currency exchange risk, since it is possible to open an account in THB.

 

Bank and political risks are another issue...

[Brunolem]

Just now, simoh1490 said:

Does your mom know you're not in your room!

 

"There is no limit on the amount of Thai baht bank notes that may be brought into the country. A person traveling to Vietnam, the People's Republic of China (only Yunnan province) and Thailand's bordering countries is allowed to take out  up to THB 2,000,000. A person traveling to other countries is allowed up to THB 50,000".

This is about cash...not about what you can wire abroad!

There are similar rules in many countries...

[simoh1490]

1 minute ago, Brunolem said:

As has been stated by many posters above, there is NO currency exchange risk, since it is possible to open an account in THB.

 

Bank and political risks are another issue...

So KHR is pegged to THB?  Here's a clue, it isn't, ergo, there is a currency exchange rate risk.

[simoh1490]

2 minutes ago, Brunolem said:

This is about cash...not about what you can wire abroad!

There are similar rules in many countries...

BOT regulations apply to cash just the same as they do to TT's. 

 

Just so you know, THB is a restricted currency, it is not fully convertible.

[Brunolem]

1 minute ago, simoh1490 said:

BOT regulations apply to cash just the same as they do to TT's. 

 

Just so you know, THB is a restricted currency, it is not fully convertible.

Believe it or not, many people, starting with this forum's members, transfer in and out of Thailand much more than 50,000 baht at a time...