Bank Savings In Thailand For Your Child

[philo]

I have heard about people who make a bank account/life insurance where you deposit money for a few years and your child will get the cash at the age of 15 or something (even if you die before the saving plan is completed). Does anybody know anything about this?

The only thing I could fin on the net was this.

[aussiebebe]

Replying to Saver + account at Siam bank.

I wanted a child-saving account, so I opened a similar account for my son almost two years ago, with Siam bank, but closed it a few months later (loosing a few thousand, non-refundable baht in the process). The account required a monthly premium of 1,500baht, which was returned, maybe with interest upon my child turning 18. I felt that the account I had was mis-sold to me by the bank, if it is the same one as the link; it's just life insurance which pays out a lump-sum if your child dies or turns 18. I didn't think it was worth it and simply bought enhanced health insurance for my son instead.

I know and understand very little about insurances so I'd like to know more about this Saver + account. Is it worth getting?

[philo]

I do not know. But I think the gereal idea is like this:

1. You deposit a sum every month for 6 years (assuming you are alive).

2. The bank gives interest (not very high).

3. The child gets the money with accrued interest after 14 years.

But even if you die after the first monthly deposit or first year or ... the child will still get the amount that the account would have reached if you had done all the deposits (6 years, 72 months). So it is not a life insurance for your child or you - it is more like a saving plan that - if not completed - will give your child the same money as if it had been completed.

I am sure somebody else will post here. For people on a limited budget, depositing a few thousand Baht a month with a 'guaranteed' outcome of a few hundred thousand Baht for your child in the future, must be an option that somebody has tried already.

(Edit: Tried to make the post clearer - don't know if I succeded.)

Edited September 4, 2009 by philo

[rgs2001uk]

The first thing to ask yourself,what is it I require?

Do I require a life insurance policy or a savings plan?

Once you have identified what you want, then look at the options available.

Regading this offer, in my opinion it doesnt satisfy either requirement.

There are better options available elsewhere.

Another option most fail to consider, what alternatives exist in my home country.

Personally I wouldnt lock myself into a plan that required me to pay X amount every month for the next Y years.

Also bear in mind there is no such thing as "guranteed" payouts, only projections.

If its a savings plan, may be worth while considering a plan with something like Aberdeen trust in Thailand, I would go for the capital growth fund instead of the regular income fund.

I am in no way affiliated with this company and am only using it as an example.

Everyones needs differ so it cant be a one size fits all, horses for courses as they say.

Please shop around, and if you dont understand what you are being sold, ask to have it explained until you do understand, then make the desicion based on your needs not the needs of the person presenting the plan.

[philo]

rgs2001uk

I am looking for something simple. The money I have left will stay in Europe and my children will not be able to touch it before they are 18 y.o. or I am dead (my wife will get access to it).

But I like the idea of doing something here. A savings account is simple - the child gets what you have deposited. But if it is combined with an assurance, there will be a payout of an agreed sum even if you haven't completed all deposits before you die.

Here is another version (but the savings part is unclear).

Surely there must be some people doing savings for their children?

[bkkjames]

rgs2001uk

I am looking for something simple. The money I have left will stay in Europe and my children will not be able to touch it before they are 18 y.o. or I am dead (my wife will get access to it).

But I like the idea of doing something here. A savings account is simple - the child gets what you have deposited. But if it is combined with an assurance, there will be a payout of an agreed sum even if you haven't completed all deposits before you die.

Here is another version (but the savings part is unclear).

Surely there must be some people doing savings for their children?

UOB offers a Child Savings Account wherein you transfer x amount for up to 5 years. slightly higher rate than normal savings accounts, including some insurance for you.

[WhiteShrek]

Why tie yourself into anything so unflexible? rates are poor on virtually all bank accounts in Thailand, so you might as well have the flexibilty. Open a normal account in the name of "ABC (child) by parent (XYD)" if you want cash savings. If you want investments you can do the save an open an account to buy mutual funds or unit trusts, again with the account name ""ABC (child) by parent (XYD)" - all sorts of mutual funds available to suit your risk: cash funds, money market funds, fixed income , corporate bunds, equities, gold etc. Pay into them as and when you wish - start and stop. Insurance policies for kids are a complete waste of money.

Shrek's little ogres have a bank account with very little in it - just gifts for birthdays etc, given the purpose is long term investment. Main money is in mutual funds, which can be added to whenever you want. Avoid a local Thai bank selling only their own products. Go to a foreign bank which offers a range of funds from different reputed financial institutions, and purchase thru them - no extra charge than going direct and all in one place.

Edited September 8, 2009 by WhiteShrek

[PattayaParent]

rgs2001uk

I am looking for something simple. The money I have left will stay in Europe and my children will not be able to touch it before they are 18 y.o. or I am dead (my wife will get access to it).

But I like the idea of doing something here. A savings account is simple - the child gets what you have deposited. But if it is combined with an assurance, there will be a payout of an agreed sum even if you haven't completed all deposits before you die.

Here is another version (but the savings part is unclear).

Surely there must be some people doing savings for their children?

In UK banks.

BBI and RBS do offshore accounts for children.

Edit: ALIL say they don't for children under 7 but they will open an account referenced to your child if younger.

Edited September 9, 2009 by PattayaParent

[philo]

Thanks to you all. I will check it out further. The reason why I want something 'fixed and unflexible' is because 1) I don't want my wife to spend it before the children are grown up and 2) If it is a too complicated investment my wife will not be able to retrieve the money (I am old enough to realize that I will be dead before my children are fully grown up).

That's the way it is in my family: Cash that is available in a common bank account my wife will spend on stupidities, cash that is in Europe she will have to ask for in small portions from my brother (after I am dead). A 'fixed and locked' savings plan here in Thailand could possibly make it 90+% sure that the money would benefit the children, not their mother and her family.

[philo]

rgs2001uk

I am looking for something simple. The money I have left will stay in Europe and my children will not be able to touch it before they are 18 y.o. or I am dead (my wife will get access to it).

But I like the idea of doing something here. A savings account is simple - the child gets what you have deposited. But if it is combined with an assurance, there will be a payout of an agreed sum even if you haven't completed all deposits before you die.

Here is another version (but the savings part is unclear).

Surely there must be some people doing savings for their children?

UOB offers a Child Savings Account wherein you transfer x amount for up to 5 years. slightly higher rate than normal savings accounts, including some insurance for you.

I guess it must be UOB Care 4 Kids Fixed Deposit. I know this is T., but the 'Privileges' can't be for real: What constitutes an 'accident' that will trigger the payout?

And it doesn't fix my primary problem: How to secure that the money is not available before the child is grown up.

Anybody knows how to do this?

[WhiteShrek]

Fixed deposits and inflexible investment plans are unlikely to be much of a deterrent to someone who really wants to get their hands on the cash. A 5 year fixed deposit can be broken by simply paying a penalty fee. An insurance policy can be made paid up or cashed in early by again paying a penalty. A few more ideas given that restricting access is your priority, rather than convenience, flexibility, and most effective investment returns:

The most secure would be some form of trust accessible only when they are say 18. This could be done via a good lawyer/ solicitor. These can be expensive in terms of set up costs and charges though. Thailand also doesn't really have trust law so you would be looking at offshore products.

For mass market products, offshore bonds like those from Skandia and Generali which are marketed by sharks can be set up this way, and could acheive this goal if you ask for them to be written in trust with your children as beneficiaries. Fees really eat into investment returns and don't let anyone tell you otherwise, but at least they can be set up to pay out to specific people on specific dates or events. Another drawback is if you commit to paying regular monthly premiums for say 18 years, and then die, you'll obviously stop making payments into the plan, so fees will have an even greater impact.

Another possibility might be paying part of the money into a pension for your child, depending on the country, eg UK they and anyone else wouldn't be able to access it before they are 55. Obviously you're not looking after their childhood, but it will look after their needs later, which is worth a thought. This ensures they at least get the benefit of some of your inheritance even if they have to wait for it...

Edited September 10, 2009 by WhiteShrek

[CWMcMurray]

I think on the face as an investment tool they may not give a really good return (slightly higher than interest in savings account), but I think that many like to use them for tax benefit...

if you are in the 30% tax range you can deduct upto 50,000 in premium payments. Based upon the Bangkok Bank website above that would be the yearly premiums for 200,000 thb in coverage. So you could save upto 15,000 per year for 7 years or about 105,000 thb in taxes.

If you add in the tax benefit then they are a little bit better than many of the non "stock" investment tools . I also do not believe that Thailand has any other tax exempt investments tools like IRAs available (if I am wrong, please let me know).

The life insurance seems to be just an added bonus more than than anything else...