Fixed Term Deposit Accounts: 5mil in One Bank or 1mil in 5 Banks?

JetsetBkk · June 29, 2021

Which banks would you choose, and why, if you had 5,000,000 Baht to salt away?

This money is only for "emergency" use and not intended for investment or growth.

I read that there is a "guaranteed" amount that banks must pay, even if they go broke, so putting all funds in one bank is probably not a good idea.

"To be on the safe side, customers will need to open bank accounts with different banks, if they want to have all or at least a substantial amount of their deposits covered. Eventually anything above 1 million baht, will not be covered in the near future. So having more than that amount in a particular bank, will put the customer at risk." - https://www.thaiwebsites.com/deposits-insurance.asp

Chris.B · June 29, 2021

There is a insurance backed guarantee for savings up to THB 1,000,000 in all the Thai banks so split it up.

However I have heard it is more in the Government Savings Bank but I haven't got any more information on that. It has been said the GSB, being a government bank, cannot default on savings accounts.

scubascuba3 · June 29, 2021

Spread it around, tough time for the banks currently

meechai · June 29, 2021

Bangkok bank only because they would be the last to fall

I did similar but...I also kept BKB accounts to 2 million each & had multiple BKB accounts

Edited June 29, 2021 by meechai

Pib · June 30, 2021

If your priority is safety of your deposits then be sure to spread the deposit across multiple "banks" to increase the amount of coverage you have under the Thailand Deposit Protection Program. And when I say "banks" I mean Bangkok Bank, K-Bank, SCB, Krungsri, etc.; I do not mean "branches" of the same bank.

Effective 11 Aug 2021 you will be insured for 1 million baht aggregated into one account per "bank." Right now it's still Bt5M. A quote from the Thailand Deposit Protection website.

Quote

What's the coverage limit

If a member financial institution’s license is revoked, depositors of that institution will receive their deposits from the Deposit Protection Agency up to the coverage limit. The coverage is based on a per depositor per institution basis (not one account per institution), meaning that depositors with multiple accounts across all branches of that institution will have those deposits - both principal and interest - aggregated into a single amount.
The current coverage limit is 5 million baht until 10 August 2021. From 11 August 2021 onward, the coverage limit will be 1 million baht.

Let's say it's now 11 August 2021 and you have Bt5M at one K-bank (or whatever Thai bank) branch and K-bank went belly up. Well, you are only insured for Bt1M under the Thailand Deposit Protection Program. Say you had Bt1M at 5 different K-bank branches (total of Bt5M), well, you are still only insured for Bt1M as your accounts at a bank whether in one of their branches or 10 of their branches is "aggregated" for deposit protection program purposes. So, under this example since you had all your money with "one" Thai bank, whether at one of their branches or multiple branches, you coverage limit is Bt1M. Now you still may be able to recover some or all of the remaining Bt4M once the bank goes thru the bankruptcy/liquidation/sell-off their remaining assets/etc., process, but that is just a "maybe" and would surely takes years to play-out.

Now if you had your Bt1M at five different banks...say Bangkok Bank, K-Bank, SCB, Krungsri, & GSB then you are covered for Bt1M at each bank for a total of Bt5M in coverage. If all 5 of these banks go belly up then you are covered for Bt5M aggregate/total.

And just because a bank might be govt owned does not increase your coverage as those bank's must follow the same deposit coverage law as all Thai banks which participate in the program. Just for example could you image what would happen if say GSB (govt owned) and K-bank (privately owned) both went bankrupt....both are part of the Thailand Deposit Protection Program but the govt decided to say, "Well, we will also cover assets of more than Bt1M if your are a GSB customer", but not K-bank customers. First, the Thailand Deposit Program Program (which is a law) does not allow that and K-bank customers would storm Government House in revolt.

And keep in mind only Thai baht accounts are covered; foreign currency deposit accounts are not covered along with some other types of accounts.

More info at the Thailand Deposit Protection Agency website which has info in English and Thai.

https://www.dpa.or.th/en/site/index

macahoom · June 30, 2021

51 minutes ago, Pib said:

If your priority is safety of your deposits then be sure to spread the deposit across multiple "banks" to increase the amount of coverage you have under the Thailand Deposit Protection Program. And when I say "banks" I mean Bangkok Bank, K-Bank, SCB, Krungsri, etc.; I do not mean "branches" of the same bank.

Effective 11 Aug 2021 you will be insured for 1 million baht aggregated into one account per "bank." Right now it's still Bt5M. A quote from the Thailand Deposit Protection website.

Let's say it's now 11 August 2021 and you have Bt5M at one K-bank (or whatever Thai bank) branch and K-bank went belly up. Well, you are only insured for Bt1M under the Thailand Deposit Protection Program. Say you had Bt1M at 5 different K-bank branches (total of Bt5M), well, you are still only insured for Bt1M as your accounts at a bank whether in one of their branches or 10 of their branches is "aggregated" for deposit protection program purposes. So, under this example since you had all your money with "one" Thai bank, whether at one of their branches or multiple branches, you coverage limit is Bt1M. Now you still may be able to recover some or all of the remaining Bt4M once the bank goes thru the bankruptcy/liquidation/sell-off their remaining assets/etc., process, but that is just a "maybe" and would surely takes years to play-out.

Now if you had your Bt1M at five different banks...say Bangkok Bank, K-Bank, SCB, Krungsri, & GSB then you are covered for Bt1M at each bank for a total of Bt5M in coverage. If all 5 of these banks go belly up then you are covered for Bt5M aggregate/total.

And just because a bank might be govt owned does not increase your coverage as those bank's must follow the same deposit coverage law as all Thai banks which participate in the program. Just for example could you image what would happen if say GSB (govt owned) and K-bank (privately owned) both went bankrupt....both are part of the Thailand Deposit Protection Program but the govt decided to say, "Well, we will also cover assets of more than Bt1M if your are a GSB customer", but not K-bank customers. First, the Thailand Deposit Program Program (which is a law) does not allow that and K-bank customers would storm Government House in revolt.

And keep in mind only Thai baht accounts are covered; foreign currency deposit accounts are not covered along with some other types of accounts.

More info at the Thailand Deposit Protection Agency website which has info in English and Thai.

https://www.dpa.or.th/en/site/index

Regarding your comment above which I have bolded:

I believe the GSB, and other government banks, are not included in the Deposit Protection Agency's guarantee.

If you speak with GSB staff, they insist that the government will guarantee all deposits in their bank, no matter how much.

4MyEgo · June 30, 2021

9 hours ago, JetsetBkk said:

Which banks would you choose, and why, if you had 5,000,000 Baht to salt away?

One bank with no more than 1 million to live off and top up annually as you go.

The balance in my home country bank, as mentioned above, transfer here via Wise when required.

Reason being home country bank guarantee's 6 million baht per bank.

clivebaxter · June 30, 2021

Does anyone really trust the one million baht guarantee here if a bank fails? probably be not for foreigner!

JetsetBkk · June 30, 2021

7 hours ago, meechai said:

Bangkok bank only because they would be the last to fall

I did similar but...I also kept BKB accounts to 2 million each & had multiple BKB accounts

Are you saying that you can open more than one account at the same bank (maybe not in the same branch?) in your own name? I didn't realise you could do that.

Ah, but:

1 hour ago, Pib said:

Say you had Bt1M at 5 different K-bank branches (total of Bt5M), well, you are still only insured for Bt1M as your accounts at a bank whether in one of their branches or 10 of their branches is "aggregated" for deposit protection program purposes.

From Pib's link (excellent post, by the way, Pib):

"all of an individual’s deposit accounts across all branches of that financial institution will be aggregated into a single amount."

First business of the day for me now, is to take out Bt1M from SCB, open a BKK bank account and put it in there! ????

GSB also looks like a good "1 of 5" to deposit in.

Edited June 30, 2021 by JetsetBkk

macahoom · June 30, 2021

23 minutes ago, JetsetBkk said:

Are you saying that you can open more than one account at the same bank (maybe not in the same branch?) in your own name? I didn't realise you could do that.

Ah, but:

First business of the day for me now, is to take out Bt1M from SCB, open a BKK bank account and put it in there! ????

GSB also looks like a good "1 of 5" to deposit in.

The GSB (and other government banks) is not included in the Deposit Protection Agency's one million baht guarantee, starting August 11th.

Edited June 30, 2021 by macahoom

JetsetBkk · June 30, 2021

7 minutes ago, macahoom said:

The GSB (and other government banks) is not included in the Deposit Protection Agency's one million baht guarantee, starting August 11th.

And yet:

"The reduction in the deposit protection has also led to the reallocation of funds as most investors, who do not put their money in stocks choose to deposit in GSB to ensure protection of their investment"

https://www.nationthailand.com/business/30175209

So what's going on? (People believe their deposits are protected).

Edited June 30, 2021 by JetsetBkk

macahoom · June 30, 2021

8 minutes ago, JetsetBkk said:

And yet:

"The reduction in the deposit protection has also led to the reallocation of funds as most investors, who do not put their money in stocks choose to deposit in GSB to ensure protection of their investment"

https://www.nationthailand.com/business/30175209

So what's going on? (People believe their deposits are protected).

What's going on is this:

The GSB say that all deposits in their bank are guaranteed by the government (not the Deposit Protection Agency) - any amount; no maximum.

Note: GSB's deposit rates at the moment are absolutely hopeless, even fixed term rates.

Edited June 30, 2021 by macahoom

Pib · June 30, 2021

4 hours ago, JetsetBkk said:

Are you saying that you can open more than one account at the same bank (maybe not in the same branch?) in your own name? I didn't realise you could do that.

Ah, but:

From Pib's link (excellent post, by the way, Pib):

"all of an individual’s deposit accounts across all branches of that financial institution will be aggregated into a single amount."

First business of the day for me now, is to take out Bt1M from SCB, open a BKK bank account and put it in there! ????

GSB also looks like a good "1 of 5" to deposit in.

Yes....you can have multiple accts at a bank/branch. Like I have my name on three Bangkok Bank accts at their head office branch in Bangkok on Silom Rd. Two of the three accts are joint accts with the wife and one is in my name only. And the wife also has an acct in her name only at the branch.

From more research it appears GSB, as a unique state-owned bank, is not covered by the Thailand Deposit Protection Program (DPP). But another state-owned bank of KrungThai Bank is part of/covered by the Deposit Protection Program. A list of banks covered by the DPP is below:

https://www.dpa.or.th/en/articles/view/list-of-insured-financial-institutions

For GSB is appears the Ministry of Finance supposedly covers deposits....could not find any coverage limits/details even at the GSB website, but I would bet the coverage limits would ultimately end-up mirroring/emulating the Deposit Protection Program.

From some old Bangkok Bank articles it appears as of around 2012 GSB had to start contributing a 0.47% fee to the Thailand Deposit Protection Program just like those those commercial banks such as Bangkok Bank, SCB, K-bank, etc. This fee is used to build-up a huge piggy bank to cover deposits in times of financial crisis. Apparently this had been a gripe of the commercial banks that they were part of DPP along with the DPP fee requirement, but GSB was not part of the DPP and did not have to pay the 0.47% fee each year...gave GSB an advantage in liabilities/costs to run a bank. So, the govt relented and GSB and other state-owned banks stated paying the fee, but as mentioned earlier they are not listed n the DPA weblink above as a bank covered by the DPP.....apparently the Ministry of Finance will supposedly insure deposit/insure GSB never fails, etc.

THAI Airways also use to be a state-owned company until their losses got so large that the Thai govt sold enough shares to where the govt was no longer the majority share holder....and we see how that bankruptcy/restructure is now going almost daily in the news....lots of investors are talking big haircuts/promises of partial repayment in the outyears.

P.S.....some non banking info: The Thai wife and I (me each farang) came back from getting our free govt AstraZeneca jab at our local private hospital here in Bangkok. Jab scheduled via the Mor Prom LINE app about a month ago using my Pink ID card...and the wife using her Thai ID card. Was in and out in around 45 minutes with 30 of those 45 minutes being the "can't leave until 30 minutes after getting the jab." Our 2nd jabs scheduled for late Sept as there is a 12 week period between the two jabs....and the Mor Prom LINE app is already showing the 2nd jab appointment the hospital made. Went smooth....zero drama.

Heng · June 30, 2021

I'd look at 1-2 banks and just make sure I meet the minimums for premium banking (K-Bank Wisdom, SCB Prime, Krungsri Exclusive, etc.), just the not having to wait in line to do counter transactions is worth the time savings IMO.

GregTN · June 30, 2021

I have a question. Let’s say my wife and myself have two accounts at one private bank and the date is after August 11, 2021. One account is in both our names with her as the primary and has a balance of 1.5 million baht. The second account is in my name only and has a balance of .5 million baht. So two people with collectively 2 million total at one bank. How would that be handled if said bank goes belly up? Would we be covered in total?

Thomas J · June 30, 2021

As a former bank executive I can tell you that government insurance even in the USA is intended to cover a limited number of bank failures. So if your concern is a specific bank, than by all means divide it up. If you are concerned about the viability of the government, or banking system here in Thailand put your money in a large USA, Swiss, UK, or German bank. There is not enough money in the USA to bail out all of the USA banks in a total collapse. The same is true here in Thailand. That is not to say you might not get your baht, but after the government prints all the necessary baht, you might need all the 5 million just to buy a plane fare to leave.

Pravda · June 30, 2021

I always have a laff when I read questions like this.

If a major bank fails, your money will be next to worthless. You will get your 5 million back in a few years when currency is worth 5% of what it was before the collapse.

I see people in Canada also obsess over this. It's quite hilarious.

macahoom · June 30, 2021

48 minutes ago, GregTN said:

I have a question. Let’s say my wife and myself have two accounts at one private bank and the date is after August 11, 2021. One account is in both our names with her as the primary and has a balance of 1.5 million baht. The second account is in my name only and has a balance of .5 million baht. So two people with collectively 2 million total at one bank. How would that be handled if said bank goes belly up? Would we be covered in total?

Yes, you'd be covered for 2 million baht after August 11th.

It's per customer, per bank - so a joint account in two names will be covered for 2 million.

topt · July 1, 2021

18 hours ago, Pravda said:

I see people in Canada also obsess over this. It's quite hilarious.

It wasn't so hilarious when B&B, Icesave and a couple of others went belly up in the UK in 2008.....

https://www.fscs.org.uk/media/press/2018/sep/10-years-after-failures/

Chris.B · July 2, 2021

It is worth adding, the insurance backed deposit guarantee doesn't cover foreign currency accounts in Thai banks.

Chris.B · July 2, 2021

On 6/30/2021 at 9:50 PM, Thomas J said:

As a former bank executive I can tell you that government insurance even in the USA is intended to cover a limited number of bank failures. So if your concern is a specific bank, than by all means divide it up. If you are concerned about the viability of the government, or banking system here in Thailand put your money in a large USA, Swiss, UK, or German bank. There is not enough money in the USA to bail out all of the USA banks in a total collapse. The same is true here in Thailand. That is not to say you might not get your baht, but after the government prints all the necessary baht, you might need all the 5 million just to buy a plane fare to leave.

I think that is pretty obvious. If you are concerned about total collapse then buy gold or land which is what Thai people do anyway.

The discussion here relates to a bank failing not a total economic collapse which is unlikely.

rwill · July 2, 2021

Another option to consider is to open a Schwab international account. With that you can wire money to Thai bank in a day or two for free. Technically there is a $15 fee but they instantly rebate it. You can also get a debit card with the account that rebates the ATM fees here. So basically with that you get fee free withdrawals from an ATM. You can withdraw $1000/day but only $500 per withdrawal. If you just leave the money sitting in the Schwab account it only pays .02% interest. But you could link a home bank account with it and leave most of the money there to get more interest and transfer it into Schwab when needed. But would add some more time to transfer it to a Thai bank account.

rickudon · July 2, 2021

On 7/1/2021 at 4:39 PM, topt said:

It wasn't so hilarious when B&B, Icesave and a couple of others went belly up in the UK in 2008.....

https://www.fscs.org.uk/media/press/2018/sep/10-years-after-failures/

I was with Icesave and another Icelandic bank - but were also covered by UK guarantee so got my money back (including interest). There is no way i would put 5 million into Thai banks 'just for emergencies'. Two million is plenty and have a couple of developed world credit cards for extra emergencies. The other 3 million can be invested in some reasonably safe stocks/bonds, these days can cash in quite quickly. Can transfer funds to Thailand within hours or a couple of days if need be - not like 10 years ago.

Thomas J · July 2, 2021

58 minutes ago, Chris.B said:

The discussion here relates to a bank failing not a total economic collapse which is unlikely.

.A total collapse likely who knows. In 2008 the world did not expect a financial meltdown either. I don't have much money in the Thai banks not for that reason but it is only a few short years ago that a coup took over Thailand. A change in government and who knows what happens to deposits in banks or the value of the baht for that matter. One this here is troubling. I am a former banker. Banks are a mirror image of the economy. When times are good banks loan money, the economy expands, and banks make lots of money. When times are difficult, people can't borrow more over, they can't pay back what they have borrowed and the financial strength of the banks is shaken. I see many businesses shuttered, and bank own repossessed homes going unsold. That is not a good sign

Chris.B · July 2, 2021

1 hour ago, Thomas J said:

.A total collapse likely who knows. In 2008 the world did not expect a financial meltdown either. I don't have much money in the Thai banks not for that reason but it is only a few short years ago that a coup took over Thailand. A change in government and who knows what happens to deposits in banks or the value of the baht for that matter. One this here is troubling. I am a former banker. Banks are a mirror image of the economy. When times are good banks loan money, the economy expands, and banks make lots of money. When times are difficult, people can't borrow more over, they can't pay back what they have borrowed and the financial strength of the banks is shaken. I see many businesses shuttered, and bank own repossessed homes going unsold. That is not a good sign

I'd keep quiet about being a former banker if I was you. It is nothing to brag about. ????????

As for "Banks are a mirror image of the economy", you seem to have a knack of stating the obvious! Do you have a book of standard quotes on economics you bring out when you feel the need?

khunPer · July 2, 2021

On 6/29/2021 at 8:51 PM, JetsetBkk said:

Which banks would you choose, and why, if you had 5,000,000 Baht to salt away?

This money is only for "emergency" use and not intended for investment or growth.

I think you still have more than 1 million baht gurantee on deposits, but split between two or even three banks might be wise.

You could consider to place some of the money in mutual funds, I'm doing that. A benefit is that there are no withholding tax on interest as the value of the fund increase instead (accumulates). When you need money you sell, and don't loose the interest from current period. It takes from one to about three banks-days to cash out, i.e. transfer money from sold fund into the assigned normal savings account. You can choose funds based on cash, which will pay you around, or little bit higher than, a 12-month fixed deposit interest before withholding tax is deducted.

I use a couple of fixed income funds from both Bangkok Bank's and SBC's security branches, the best in my view is SCBFP, which so far has a gain of 0.31% YTD (i.e. 062% PA), link HERE; a 12-month fixed rate is at the moment 0.50% PA before tax.

portlandtree · July 2, 2021

why put more then required? they invest your money and make quite abit more then they give you. i read one guy asking where to put it as he is not interesting in gains or investments as he wants it for emergency use well damn invest it in vanguard you can get the money the next day. did he know that there is a limit of $200,000 baht per day so if he had it in the same bank in 5 accounts the 5 million it will take him 25 days to get the 5 million 555.

kynikoi · July 2, 2021

On 6/30/2021 at 5:07 AM, scubascuba3 said:

Spread it around, tough time for the banks currently

No it's not. They are awash in cash

Mickeymaus · July 2, 2021

Yes there is a (decreasing) deposit insurance. Just be aware of the fact that it will not cover deposits in foreign currency.

macahoom · July 2, 2021

15 minutes ago, portlandtree said:

why put more then required? they invest your money and make quite abit more then they give you. i read one guy asking where to put it as he is not interesting in gains or investments as he wants it for emergency use well damn invest it in vanguard you can get the money the next day. did he know that there is a limit of $200,000 baht per day so if he had it in the same bank in 5 accounts the 5 million it will take him 25 days to get the 5 million 555.

"did he know that there is a limit of $200,000 baht per day"

Can you explain what this means, please?

Edited July 2, 2021 by macahoom

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