Different Fixed Deposit Bank Interest Rates For Foreigners

[camerata]

I've just been told by Siam City Bank that there is a lower fixed deposit interest rate for foreigners. They say it's a regulation of the Bank of Thailand that they didn't know about before but have to enforce now. I pointed out that I was a resident with an Alien's Book, but that didn't make any difference. I then thought about all the elderly Chinese in Thailand who refuse to get Thai citizenship and seriously doubted that they would be getting stuck with foreigner interest rates. Sure enough, when I pointed out that I had a tabien baan and a 13-digit 'citizen's number' just like a Thai, they said I could have the Thai rates. It still sucks though.

This doesn't apply to regular savings accounts, however. They have the same interest rate for foreigners.

[churchill]

Correct but I think if you speak nicely to the person filling in your details when opening the account She/He can put a Y instead of a N in the right place .

[Tywais]

My fixed accounts interest at Bangkok Bank are not different from Thais so don't understand what they are referring to regarding a BOT regulation.

[camerata]

My fixed accounts interest at Bangkok Bank are not different from Thais so don't understand what they are referring to regarding a BOT regulation.

Me neither. I've been a customer with them for many years and always got the same rates. They also have copies of my PR and Alien's Book. When I asked about this they said they had been "phit tang tae laek." I asked if other banks had the same policy and they couldn't give me a definite answer - then they said it was a BOT regulation.

What's annoying was that instead of asking, "Do you have a tabien baan?" they were just going to give me the "foreigner" rate because to them I am a foreigner.

[churchill]

I have been told by Bangkok Bank staff that foreigners cannot get interest on accounts ( or only a very low rate ) because of new rules but because I had opened my account some time ago this did not apply ?

[chiangmaibruce]

I assume the OP is talking about a baht account and not a foreign currency account

I just looked in the SCIB web site and confirmed there is a difference in rates, and have emailed them to query the justification for this. I will post the reply here as and when I receive one.

I have also emailed the Bank of Thailand for details on what (if any) regulation is in place that would justify this difference in rates (but not holding my breath for a response to that one)

Do any other TV members have relevant details on this issue?

[Tywais]

Do any other TV members have relevant details on this issue?

I've been going over the BOT site but it is a pretty busy place trying to find the right document. Just for others if they want to wade through it.

BOT English language documents

Current Interest Rates of banks

[camerata]

I assume the OP is talking about a baht account and not a foreign currency account

Yes, this was a baht account. 6-month fixed deposit, interest for Thais (or PR) 1.00%, interest for everyone else 0.75%.

[chiangmaibruce]

Yes, the BOT web site has an enormous amount of info in it but difficult to navigate around and find things.

The Thai bank interest rate page make no mention of different rates for foreigners. I would guess that te interest rate differential is a retail bank initiative, and nothing to do with the BOT, and I have also emailed the Thai Banking Association to get their position on this.

[chiangmaibruce]

Still no response from either SCIB, BOT or Thai Bankers Association on this issue.

I did find this old article in which the BOT says that the rate differential has nothing to do with them:

www.phuketgazette.net/articles/article524.html

I have also been through the BOT circulars to banks and can find no directive on this issue.

I have confirmed with KBank that they do not have any differential for thai or non-thai customers - not sure how many other banks fall into each category

Starting to look like like some banks are quite simply lying by blaming it on BOT

[BigSnake]

Pretty much the norm in LOS they will stick you with what ever you will allow them to get away with.

[chiangmaibruce]

From the Letters to the Editor section of today's Bangkok Post:

Bank elsewhere

Sandy Williams (Postbag, May 7) rightfully pointed out that many Thai banks apply two-tier standards (for Thai and foreign nationals) when setting interest rates.

However, this first came up in the wake of the 1997 home-made financial crisis and not just recently. The banks that do this tell a blatant lie when they claim the instructions come from the Bank of Thailand. The central bank does not fix the private banks' interest rates. However, it is a regulation of the Bank of Thailand that all interest rates have to be published openly in every branch office of every bank. So if they give anybody a lower rate, this is a clear case of fraud.

Knowing that taking a bank to court will result in additional cost and nothing else, I advise every non-Thai bank customer to inquire about the rates applicable to them, and if the rate is lower than the rate for locals, close all your accounts at that bank and walk across the street to another bank that offers the same rates for everyone. About 10 years ago I did exactly that, much to the surprise of the bank's staff.

SAM MUNICH

[camerata]

In my case they were very open about it. The rates posted on the noticeboard that they had shown me only a week before had no rate listed for foreigners, but they showed me a more detailed rate list (in Thai) with separate rates listed for fixed deposits. They seemed genuinely worried that they had been giving me the wrong rates for many years. This may be due to them recently getting a new manager who I'm told is very strict about the rules.

Whatever. I spent a quarter of a million baht getting PR, so if it gets me a little extra bank interest I'll consider it payback. On the other hand, things haven't been so relaxed at SCIB since the new manager arrived so I guess I'll start shifting some business back to K-Bank. Anyone have any good comments about their K-Treasury and K-Money schemes?

[Maestro]

...many Thai banks apply two-tier standards (for Thai and foreign nationals) when setting interest rates.

However, this first came up in the wake of the 1997 home-made financial crisis and not just recently. The banks that do this tell a blatant lie when they claim the instructions come from the Bank of Thailand...

Exactly. There is no government agency requiring banks to pay foreigners a lower interest rate.

I've just been told by Siam City Bank that there is a lower fixed deposit interest rate for foreigners...

I have never looked at the rates of Siam City Bank but other banks I checked made a distinction between “resident” and “non-resident” accounts for savings accounts and fixed deposit accounts, not between Thai nationals and foreigners.

If your bank refuses to recognise you as a resident, take your business elsewhere or, if you wish, complain to head office. A lot of bank employees, including branch managers, do not know how to distinguish correctly between residents and non-residents. A branch manager of Bank of Ayudhya told me that no interest would be paid on my savings account because I am a foreigner but in fact interest has been credited every year. The branch manager has in the meantime been promoted.

--

Maestro

[Maestro]

From the website of Siam Commercial Bank:

Source: www.scb.co.th/img/en/rate/deposit-eng.pdf

--

Maestro

[Maestro]

From the website of Bangkok Bank:

Source: www.bangkokbank.com/Bangkok+Bank/Web+Services/Rates/Deposit+Rates.htm

--

Maestro

[Tywais]

I would venture a guess that it all depends on what each bank/branch/manager defines as non-resident. I've had an account with Bangkok Bank for over 20 years and they have my work permit details on file. I don't know if any of that is a factor, but I've always been getting same rates as resident.

[Naam]

I assume the OP is talking about a baht account and not a foreign currency account

Yes, this was a baht account. 6-month fixed deposit, interest for Thais (or PR) 1.00%, interest for everyone else 0.75%.

fancy rates! this is what i got from my bank last week.

quote:

Good morning Sir, our current rates (nett) are as follows:

Call USD 0.05%

Call EUR 0%

spot 1 week time deposit USD 0.014%

spot 1 week time deposit EUR 0.349%

spot 1 month time deposit USD 0.143%

spot 1 month time deposit EUR 0.649%

[chiangmaibruce]

Just to complete this discussion, the Thai Bankers Association were kind enough to send a response to me on this matter ... see below

"Dear Mr. X

With reference to your emails concerning the treatments of non-resident baht accounts in Thailand, I apologize for the delay of my response and I would like to clarify with you as follows:

From the published interest rates of major Thai Commercial Banks, all term deposit accounts with maturity over six months offer the very same interest rates regardless of whether they are residents or non-residents. Due to the Bank of Thailand’s regulation (referred to the Bank of Thailand’s Notification No. 371/2551 dated 29 February 2008 Re: Cooperative Measures in Preventing Speculative Activities on the Thai Baht), Commercial Banks are forbidden to make interest payments on saving and current accounts held by non-residents. In addition, all fixed-term deposits offered to non-residents must have a maturity of not less than six months. (Therefore, non-residents are not being offered with the term deposit products with shorter maturity, i.e., three months.)

Pertaining to your concerns of the unfair treatments to long-term residents of Thailand (people who hold a non-immigrant or retirement visa), please be informed that neither the regulation nor the current commercial banks’ practice prohibits the long-term residents to open/maintain resident baht accounts with Thai Commercial Banks.

Lastly, the Bank of Thailand regularly provides the public information on interest rates offered by Commercial Banks in Thailand. You can find the information on the following link: http://www.bot.or.th/english/statistics/fi...te/IN_Rate.aspx

I hope that I have clarified all of inquiries. Please do not hesitate to contact me if you require additional information.

Sincerely,

The Thai Bankers’ Association"

and here is some related information:

1. The BOT directive referred to in the above letter:

http://www2.bot.or.th/fipcs/Documents/FOG/2551/EngPDF/25510070.pdf

refer page 14/15

2. The BOT definition of a non-resident:

Natural persons not of Thai nationalities and not having alien identity or residence permits

http://www.bot.or.th/English/ForeignExchangeRegulations/Measure_to_Prevent_Thai%20Baht_Speculation/Pages/Definition_NR.aspx