Change to deposit protection at Thai banks will have little impact

[david555]

1 minute ago, jacko45k said:

That hardly fits the bill with respect to having a retirement extension. Nor those wishing to self insure against a medical emergency, rather than shelling out 50-100,000 baht every year.

Why not ?

 

One bank for ext.ret.

a second one for self insurance ..... and so further on for different options ....

[Chiang Mai Will]

15 minutes ago, jacko45k said:

Yes, each bank offers 1 Mil Cover, (but not on FCDs I believe).

What is a FCD?

[Scouse123]

29 minutes ago, EricTh said:

What about 2 accounts in two different bank? Can that be more than 1M THB?

Yes,

 

One account with Krung Thai and one with SCB and I million in each and so on.

 

two accounts, you and your wife,( example Bangkok bank and Krung Thai bank ) in each different bank in each of your names = 4 million baht., three different banking institutions = 6 million, and so on.

 

BUT, Don't put it in a different branch of the same bank!!

 

 

 

 

 

 

 

 

Edited August 11, 2021 by Scouse123

[TallGuyJohninBKK]

1 hour ago, webfact said:

Accounts over one million baht continue to rise and will be the greatest driver of increases in savings in Thai banks. 

 

Wow!  Really surprising here in the OP article that we have a THAI BANK telling the world that it doesn't really matter that government deposit protection insurance on THAI BANK accounts is being cut from 5 million down to 1 million.

 

Yes, most average Thais probably aren't keeping more than 1 million in their Thai bank account. But they're not the only ones who use Thai banks. And for those who do have larger amounts, the latest change is a real disincentive to keep larger sums on deposit here.

 

[TallGuyJohninBKK]

53 minutes ago, jacko45k said:

It is worse than that, you stated individual accounts in the case of the USA. In Thailand, it will be per individual account holder... ie my 2 accounts with the bank only have a total protection limit of 1M THB.

I believe the limit is (now) 1 million per depositor per bank.  So yes, two different accounts you hold at the same bank company would share the 1 million limit.

 

But, if you had one large account at BKK Bank and another at Krungsri Bank, each would have their own separate 1 million coverage, AFAIK.

 

[worgeordie]

So will depositors with large sums in their accounts, open up

more accounts at 1 Million, each or move their funds to Government

banks, Government Housing Bank, Government Savings Bank, and

the other one Agriculture Bank ? * , that would be very welcome for

the Government who seem to be spending like a drunken Sailor .

regards worgeordie      * which are covered a 100 %, unless Govt goes bust ????

[ianguygil]

Honestly this is one of the subjects most recently raised to me, and just yesterday an elderly English man came running out of his home when he saw me walk by and asked me "why now". "Does this mean that some banks will fail soon? ". He has just sold up in the UK and moved over to Hua Hin "permanently". My wife is Japanese and her friends have been contacting me to ask if their retirement funds are "safe". Seems to be a real issue of concern

You guys have all covered this quite well. This was a long time in coming. This was not a recent development brought upon us because of COVID or something else. The deposit insurance was increased during the Financial Crisis 12 or so years ago, in order to ensure we don't have runs on the Banks. It was lowered to 5 million, then it is lowered again now to 1 million per depositor per financial institution. And you have it right in terms of it being limited to that no matter how many accounts you open in a single institution

 

This is supposed to do a couple of things. Firstly ensure that the insurance is paid for and solvent and will be there when needed. Secondly to introduce more competition into the market, because banks who are viewed as smaller may have to pay higher rates than banks who are better capitalized. 

 

Now it is really important to note that ALL Thai commercial banks are well capitalized. The BOT are very smart people. All of the major banks sail through stress tests. 

 

If this is something which will keep you up at night, then the most conservative thing to do is to put your cash into multiple banks as you said. But please remember this insurance only applies to THB savings accounts. Not to Foreign Currency accounts. Not to Mutual Funds and Stocks. If you are really concerned then you can invest in Thai government debt which is backed by the full faith and credit of the people who issue the Baht. 

 

This is as always purely the information as I have it. It is not official communications from the Bank. It does not constitute investment advice. I have just seen so much concern personally from contacts and particularly from older people who don't have an easy way to earn back any losses, that I thought I would say a few words from my knowledge. But then again, I am a technical propeller head, so what do I know ......

[jacko45k]

13 minutes ago, Nickelbeer said:

That's why I use an agent.

I can see the reasoning... whether to import 65,000 every month or put 800k on deposit, or pay an agent the 12-15,000 is a choice. The latter is an easier life, but some don't like to spend that. 

[Scouse123]

Well banking representatives are not going to say anything else, are they?

 

Just like TAT are going to tell you how well the sandbox is doing or the health minister to tell you everyone will be vaccinated by October, etc

 

These people are strangers to the truth.

 

 

 

 

 

 

Edited August 11, 2021 by Scouse123

[jacko45k]

14 minutes ago, david555 said:

Why not ?

 

One bank for ext.ret.

a second one for self insurance ..... and so further on for different options ....

Well I lived here for many years with a single bank account... then more recently I was sort of forced to get another.... what a palaver. They don't make it easy...and I do dislike the grumpy lady doing the residence certificates. It just seems stupid to spread the money about like that, unless forced, as we are now being. 

[jacko45k]

18 minutes ago, Chiang Mai Will said:

What is a FCD?

Foreign Currency Deposit. You can have a Sterling account (for eg) and it qualifies for the retirement extension if kept above 800,000 THB equivalent. 

[PFMills]

17 minutes ago, Nickelbeer said:

That's why I use an agent. I am not importing 65 thousand baht into Thailand merely to get an extension. Agents mitigate that problem quite nicely. While paying 500 dollars to be allowed to spend your money in Thailand is a ripoff, it is my only option until the Covid insanity ends and I can move to more welcoming shores.

How do you manage to spend less that 65,000 each month, we have a house and car and no finance to pay but rarely spend less than that. However I have just checked and yes we did spent less in each of the two previous months. But it hasn't been much fun!

[jacko45k]

12 minutes ago, TallGuyJohninBKK said:

I believe the limit is (now) 1 million per depositor per bank.  So yes, two different accounts you hold at the same bank company would share the 1 million limit.

 

But, if you had one large account at BKK Bank and another at Krungsri Bank, each would have their own separate 1 million coverage, AFAIK.

 

Yes understood. ????

[jacko45k]

1 minute ago, PFMills said:

How do you manage to spend less that 65,000 each month, we have a house and car and no finance to pay but rarely spend less than that. However I have just checked and yes we did spent less in each of the two previous months. But it hasn't been much fun!

I used to think like that, then Covid and lockdowns came to pass.  Now we use it for monopoly.

[david555]

Just now, jacko45k said:

Well I lived here for many years with a single bank account... then more recently I was sort of forced to get another.... what a palaver. They don't make it easy...and I do dislike the grumpy lady doing the residence certificates. It just seems stupid to spread the money about like that, unless forced, as we are now being. 

sometimes to bow the head humble .....makes life simpler ????......(especially in Thailand )

[jacko45k]

Just now, david555 said:

sometimes to bow the head humble .....makes life simpler ????......(especially in Thailand )

Well having 4 bank accounts does not sound simpler. I am getting old, one has to k.i.s.s. (ass) a bit. 

[david555]

Just now, jacko45k said:

Well having 4 bank accounts does not sound simpler. I am getting old, one has to k.i.s.s. (ass) a bit. 

Feel yourself blessed to NEED 4 accounts .....  some even not have 1 , hence the need of "agent(s)" ????

[TallGuyJohninBKK]

The Thai DPA's announcement on the reduction appears to indicate that there are about 1.6 MILLION depositors, or about 2% of nearly 84 million, whose accounts have deposits in excess of the current reduced limit.

 

1.6 million depositors is hardly "little" impact.

 

https://www.dpa.or.th/en/articles/view/deposit-protection-coverage-1-m-baht-per-depositor-per-institution-effective-as-of-11-aug-2021

 

[NemoH]

1 hour ago, darrenr said:

BS ! We are going to have a global crash in the order of 65-80%,the banks know this, before anyone calls me a quak , do you honestly think that given the recent pandemic, insane QE /money printing that there will not be consequences? Inflation will be out of control and the central banks will start to tighten to try and control inflation, Interest rates will rise and crush the economy. Don’t have money in Thai  banks that you can’t afford to lose ! Think Asia Crisis !

We are the most overvalued market since 1929 (Great Depression), do your research if you don’t believe me !

Absolutely agree with you.. we are staring at a potential crash in near future .. don’t know when but be prepared..you have been warned by their actions and those around the world.

[Boarn]

If all the banks fail, the value of your 'money' will decrease substantially and there will likely be a lot more to worry about that the government stepping in to reimburse depositors.

 

Where is the government going to get the 'money' from to reimburse people, likely they will print more. Government backing of deposits at banks is a false safeguard at best or an outright scam at worst.

[2 is 1]

 I retire 2017 when i was 45 years old coz i listen myself and do like i have put note here also. Maybe i do wrong who knows , anyway have enough capital to do what i want!

[Ricky HKT]

1 hour ago, darrenr said:

BS ! We are going to have a global crash in the order of 65-80%,the banks know this, before anyone calls me a quak , do you honestly think that given the recent pandemic, insane QE /money printing that there will not be consequences? Inflation will be out of control and the central banks will start to tighten to try and control inflation, Interest rates will rise and crush the economy. Don’t have money in Thai  banks that you can’t afford to lose ! Think Asia Crisis !

We are the most overvalued market since 1929 (Great Depression), do your research if you don’t believe me !

Why all the excitement and drama? 

I just read that the IMF has issued another $650B in special drawing rights (SDRs) to cover any central banks liquidity issues. 

https://www.reuters.com/article/us-g20-finance-imf-reserves-idUSKBN2F404Q

Available August 23.

Problem solved! /s

[TallGuyJohninBKK]

5 minutes ago, Boarn said:

Government backing of deposits at banks is a false safeguard at best or an outright scam at worst.

The current Thai DPA system has never really been tested, because its creation came after/as a result of the Asian Financial Meltdown.

 

But in the U.S., by comparison, there's a long history of federal government protections of bank deposits, and that has been tested countless times by numerous bank failures, and it has paid out for covered deposits each and every time, pretty much without fail over decades.

 

So, government deposit insurance of bank accounts certainly can work.... But it depends on the system set up and the government standing behind it.

 

[Millcx]

2 hours ago, 2umich said:

So they were waiting for decade to reduce deposit guarantee and decided do it now, when a lot of people unable to pay they debt. Perfect timing. Nothing to worry about.

55555555555555555555554

[schweizer]

18 minutes ago, Boarn said:

If all the banks fail, the value of your 'money' will decrease substantially and there will likely be a lot more to worry about that the government stepping in to reimburse depositors.

 

Where is the government going to get the 'money' from to reimburse people, likely they will print more. Government backing of deposits at banks is a false safeguard at best or an outright scam at worst.

In Switzerland we have the "too big to fail" policy, but this is very much a false logic and unsustainable, here I am thinking Credit Suisse/UBS. Not sure which banks in Thailand would fit this characteristic

[TallGuyJohninBKK]

Here's a prior graphic from Standard Chartered Bank that gives you some idea how long the government has been at work trying to whittle down the maximum amounts covered by their deposit insurance. It's been a long, ongoing process stretching back years.

 

The graphic below is a bit off, because I believe they gave an additional one year delay of the date of the reduction to 1 million, which previously was supposed to happen last year, until the current change this year. 

 

Edited August 11, 2021 by TallGuyJohninBKK

[itsari]

Any individual will think again about depositing more than one million with a Thai bank . If not they should;

[Almer]

1 hour ago, EricTh said:

So what's the best way to park our money?

 

Cowboy

[Geoffreyt]

My wife and I have a joint deposit account of 1 million 600 thousand to cover my 800,000 annual retirement extension.

As this account is in 2 names would that mean government

deposit protection of 2,000,000.  Or is this just wishful thinking. 

Thankyou

[Kalasin Jo]

2 hours ago, brucegoniners said:

Oh really? Sounds like wishful thinking from Thai banks, especially since a Thai bank wrote this, lol

 

Of course most Thais don't have a million baht in their account. We do.

 

My wife and I were talking yesterday about opening a second account at another bank to spread our money around and not be over the one million baht threshold. So whether they know it or not, there will be changes.

 

However I doubt it will affect any one bank, since all banks will be affected, losing and gaining from it rather equally.

 

If any banks will benefit it's likely to be some of the lesser known banks who will get deposits they wouldn't otherwise have. Just my humble opinion.

Not sure that will work. I have read that this guarantee is per account holder not per account. If that is so multiple accounts even in different banks, will not help.  Please correct me if I have that wrong.