What's A Good Alternative To Fixed Deposits?

[camerata]

Now that fixed deposit interest rates are going down in Thailand, what's a good alternative for those who are resident here?

[cclub75]

Now that fixed deposit interest rates are going down in Thailand, what's a good alternative for those who are resident here?

Fixed deposit... in a real currency (AUD, EUR)... in a stable country (Singapore) and... with no taxes on interests earned (contrary to Thailand).

Voila.

Check the rates :

http://www.ocbc.com/personal-banking/

5.70 % pa for AUD, one month maturity for security.

Alternatives in Thailand, right now and for mid term, are suitable only if you are a gambler (stock, bonds etc.).

[samran]

you've probably done this already, and it isn't exactly what you want, but you could do worse in investing in a conservative government approved Long Term Fund and write off the investment as a tax deduction for the year you invested it, which for me at least I use to factor in the 'returns'. The 5 year time frame for these funds in reality is only 3 years, as investing on the 31st of December means that the next day 1 Jan, is already yr 2 for the purposes of the fund.

[camerata]

Fixed deposit... in a real currency (AUD, EUR)... in a stable country (Singapore) and... with no taxes on interests earned (contrary to Thailand).

Thanks. The 1.7 million baht minimum deposit is a bit steep. I'm on a Thai salary! And couldn't you still take a loss if the value of the baht goes up against that country's currency?

[camerata]

you've probably done this already, and it isn't exactly what you want, but you could do worse in investing in a conservative government approved Long Term Fund and write off the investment as a tax deduction for the year you invested it, which for me at least I use to factor in the 'returns'. The 5 year time frame for these funds in reality is only 3 years, as investing on the 31st of December means that the next day 1 Jan, is already yr 2 for the purposes of the fund.

Actually, I looked at LTF briefly and RMF in more depth a couple of years ago. I'm still not exactly sure what happens if you lose your job or if you retire before the 5 years is up. The investment is supposed to come from earnings, I believe, and the tax people request documentation.

What would be the advantage of LTF over RMF? Basically, I have two requirements. One is to invest a modest lump sum that's currently in a fixed deposit account and the other is regular monthly saving for the next few years.

[junkofdavid2]

Re: OCBC Singapore website by poster cclub75

If you scroll down, it seems to indicate that for the regular account (Call Deposit?) the minimum is only 5,000 USD.

My question is:

Can a non-Singapore resident open such an account?

The website doesn't seem to suggest that we can.

Edited May 18, 2007 by junkofdavid2

[samran]

you've probably done this already, and it isn't exactly what you want, but you could do worse in investing in a conservative government approved Long Term Fund and write off the investment as a tax deduction for the year you invested it, which for me at least I use to factor in the 'returns'. The 5 year time frame for these funds in reality is only 3 years, as investing on the 31st of December means that the next day 1 Jan, is already yr 2 for the purposes of the fund.

Actually, I looked at LTF briefly and RMF in more depth a couple of years ago. I'm still not exactly sure what happens if you lose your job or if you retire before the 5 years is up. The investment is supposed to come from earnings, I believe, and the tax people request documentation.

What would be the advantage of LTF over RMF? Basically, I have two requirements. One is to invest a modest lump sum that's currently in a fixed deposit account and the other is regular monthly saving for the next few years.

No real difference as far as I can see. I know mostly about LTFs as I invested in one last year, we just deposited a lump sum and then I gave the documentation to my HR who calculated my tax accordingly. When I went to the revenue department this year to do my tax return, I showed them the receipt for the LTF and that was it. Note that the Tax decution is only in the year you invest.

If you lose your job/stopped working with the LTF nothing would happen. The only penalty is that if you withdraw the funds before the end of the term, you'll have to pay back the income tax savings you made when you first invested, thats it.

[camerata]

So the 5-year requirement for LTF and RMF is just that you don't take the money out for that period, right? You can put a lump sum in the first year and not add any more in subsequent years, and then you get the tax refund in the first year. If the tax refund is at the 30% rate, you can then invest it in something else...

[cclub75]

Thanks. The 1.7 million baht minimum deposit is a bit steep. I'm on a Thai salary! And couldn't you still take a loss if the value of the baht goes up against that country's currency?

Yes you're right there is an exchange rate risk.

However, it's a matter of balance. AUD is lifted by the fact that australian economy is a "commodities" economy (plus strategic reserves of uranium, and as you know uranium is very... trendy nowadays...). Plus the China factor (who will continue to consumme commodities, eventhough we have a worldwide slow down).

Euro has good advantages too (can play the currency reserve role, against USD).

On the other hand... THB... I mean with the total political mess we have... it's difficult to remain confident.

[cclub75]

Can a non-Singapore resident open such an account?

The website doesn't seem to suggest that we can.

It's possible.

2 ways (from what I heard with this bank) :

-invest minimum 10 000 SGD in one of their funds of unit trusts.

-or go higher, and put minimum 200 000 SGD (or equivalent) into fixed deposits, to get the "premier" status.

Anyway : you have to go there, yourself. With cash and all the proper documentation (identity, proof of bankings with other banks, europeans banks are appreciated etc.).

Edited May 18, 2007 by cclub75

[samran]

So the 5-year requirement for LTF and RMF is just that you don't take the money out for that period, right? You can put a lump sum in the first year and not add any more in subsequent years, and then you get the tax refund in the first year. If the tax refund is at the 30% rate, you can then invest it in something else...

for LTF at least, that more or less overs it. Nothing to stop you from buying units in another fund in the same or subsequent years, though you can't invest more than 300,000 baht or more than a certain % of your salary in any one year into LTF's.

RMF I'm less familiar with, as I have my superannuation invested through a fund in OZ.

I had the choice of pocketing the LTF tax deduction one of two ways:

telling my employer straight off and HR adjusted my pay packet accordingly (though still had to submit tax return with evidence with 0 baht refund). Pocketed the difference in my monthly pay packet.

or

not tell HR, and then letting the revenue department know at years end that I had made the LTF investment....and then waiting for a refund. Depending on how disciplined you are, the latter choice may be the best!

[RusT]

The Stock Exchange of Thailand

www.set.or.th

dividends up to 11%.

[Edonista]

The Stock Exchange of Thailand

www.set.or.th

dividends up to 11%.

The problem is that you have no guarantee future dividends will be like the last one paid, or even that any dividend will be paid at all.

Also you have no guarantee the stock price will not decline more then dividend paid, consider for example SICCO , JTS, CHUO.

[camerata]

for LTF at least, that more or less overs it. Nothing to stop you from buying units in another fund in the same or subsequent years, though you can't invest more than 300,000 baht or more than a certain % of your salary in any one year into LTF's.

15%, apparently. Did you get the type that offers a dividend?

[Khun Bob]

Hi

Seems to be a big difference between their account opening requirements - 10000+SGD or 200000+SGD !

I think I'd go for the lower option...

Have you opened an account there yourself ?

Just wondered if you already have an account within the OCBC group, if that would help in Singapore ?

Cheers

Can a non-Singapore resident open such an account?

The website doesn't seem to suggest that we can.

It's possible.

2 ways (from what I heard with this bank) :

-invest minimum 10 000 SGD in one of their funds of unit trusts.

-or go higher, and put minimum 200 000 SGD (or equivalent) into fixed deposits, to get the "premier" status.

Anyway : you have to go there, yourself. With cash and all the proper documentation (identity, proof of bankings with other banks, europeans banks are appreciated etc.).

[samran]

for LTF at least, that more or less overs it. Nothing to stop you from buying units in another fund in the same or subsequent years, though you can't invest more than 300,000 baht or more than a certain % of your salary in any one year into LTF's.

15%, apparently. Did you get the type that offers a dividend?

no, went for the ING good corporate governance fund. Hasn't done greatly, but hasn't gone down. It is only the first year, and the SET is as a whole quite cheap if you look at PE ratios, so for me it is a good time to put some of my money into Thailand. The rest is in the OZ or UK.

[cclub75]

Have you opened an account there yourself ?

Just wondered if you already have an account within the OCBC group, if that would help in Singapore ?

1-No. But a close friend of mine did one year ago (frenchman living in Thailand). Went there with 5000 euros cash. Open the account "premier", get his number and then transfered the bulk of the money after (on various foreign currency time deposits). He receives the bank statements in Thailand.

2-I guess so if you're already a customer of OCBC in Malaysia for instance. You have a customer history, banks like that.

I would like to bring to your attention other banks in Singapore, like DBS. They propose a "off shore" service too (Treasures International Priority Banking) , with a minimum amount of 200 000 SGD (or equivalent, same as OCBC).

http://www.dbs.com/treasures/offshore/bankinganswers/

Edited May 20, 2007 by cclub75

[camerata]

I just got an SMS from CityBank about some promotion where you deposit 2 million baht in a fixed deposit account and get good interest rates. When I called them about it they said foreigners could only have an account in US dollars...

[Nordlys]

Did you get the type that offers a dividend?

I got 3.11% per annum dividend on my LTF fund last year, and 1.69% dividend for the period up to May 11 this year (from the previous dividend paid which was October 19th). Of course the income tax saving is much greater than that.

[simcity]

Lend to a friend ?

Lol just joking .

If you think the currency bath will lose strength during the year, with the low interest given , and think the gold will increase , perhaps few baht of gold as ingot is good to have .

[ray23]

Good stuff here guys thanks.

I have an unusual problem in that my savings account is in the states, upon y death it woudl appear it wouod be very difficult for my wife to get the funds out of ut, since she is not named on the account. The only way at this juncture to put her on the account would be to travel there. Since she has no SS number or federal Tax number, I doubt that it could be done even with the travel, which I don't want to do.

Would these accounts ion Singapre be a vialble atlernative to that problem?

The toehr question is just how do ifficult iis to remove large sums of money from Tjh hailand if yuo have a larger saing accunt here.

The reason I ask I have heard a recent story where in a Brit sold his condo in Jomtien. Placed the procceeds in the Bank of Bangkok, qi with the intent of transfering them to the UK. Where he wa returning to live. The bank would not allow him to do that, his only option was to use the ATM at the rate of 20K baht perday. Reason given the bank deemed it to be " Dirty Money"

If this is true and I don't know to be true but if it is, is is certainly something to consider in bringing funds into or ceratin laege accounts this country.

[camerata]

If this is true and I don't know to be true but if it is, is is certainly something to consider in bringing funds into or ceratin laege accounts this country.

If you bring large sums of money into Thailand you can get a certificate from the bank that allows you to take them out again. I've done it for sums like US$1,000 in the past.