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Why Do Thai Banks Have Such Low Interest Rates?


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Simple question... Thai banks interest rates are incredibly low and have been since before the financial crisis. I am just wondering why that is so... and why would Thai people keep money in Thailand when they can get much better rates offshore

Thanks

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"why would Thai people keep money in Thailand when they can get much better rates offshore"

please tell us where exactly you can get much better rates offshore for Thai Baht :)

Not hard to convert Thai Baht to another currency.

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Interest rates are low, because there is little pressure on the banks to make them higher.

Yes, the small percentage of Thais that have the means to put money offshore can do it, and get higher interest. First this translates into a little bit harder access to funds. And typicaly they have to convert to something other than Thai baht. This means they now have to pay fees to convert from Thai baht to what ever currency they will be using, and then back again if they want access to the funds as Thai baht. Additionally since the funds will be sitting in the bank in some form other than Thai baht they will now also face the risk of currency rate fulxuation - as the exchange rate between the baht and what ever currency thier funds are sitting in at the offshore bank. All of this translates into very little pressure on Thai banks to raise interest rates due to the offshore banking option.

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I was talking to the lady I know that runs the small shop up from where I live, she was looking for some advice about investing her 150 baht per day profit in an HSBC Offshore account - she thought the idea was so good, she went round and told all her rice farming friends, who reckoned if they all chipped in together they could start a fund immediately to help them in their older years with about 5 baht a week!

No longer the worries of old age - an investment offshore to make them all comfortable in those Winter years.

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I have 2.8 % interest in my bank back in my home country Norway , not bad :D

I get 6% on my daily account back home and a few weeks ago got a fixed term at 8.25%, in my home country :) but its not going to help anyone with thai baht. :D

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I leave my money in a Savings Account in Australia. I have half in an online account at 6.15% and the rest in a Term Deposit at 7.5% with the monthly interest redirected to the online account. Then I just transfer funds online to my thai account when needed, $22 to transfer and it usually clears in 48 hours.

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"why would Thai people keep money in Thailand when they can get much better rates offshore"

please tell us where exactly you can get much better rates offshore for Thai Baht :D

Not hard to convert Thai Baht to another currency.

and lose via the exchange rate more than what was paid in interest? :)

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I have 2.8 % interest in my bank back in my home country Norway , not bad :D

you get annually 2.8% interest but your home country currency NOK has lost 24% vs. Thai Baht in the last two years. so tell us "where's the beef? :)

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I saw an advert for one of the thai banks, think bkk bank the other day and they were offering up to 5 or 6% if you left the funds in a certain account for over 37 months. I just cant remember the details now - old age, it must be really hard for poor ole Naam.

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I leave my money in a Savings Account in Australia. I have half in an online account at 6.15% and the rest in a Term Deposit at 7.5% with the monthly interest redirected to the online account. Then I just transfer funds online to my thai account when needed, $22 to transfer and it usually clears in 48 hours.

you better check your online rate and report back again. there is no bank in Australia which pays 6.15% on short term cash when it can refinance at 4.85% interbank rate.

the information "term deposit 7.5%" without stating when established and for what length of time means nothing.

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I leave my money in a Savings Account in Australia. I have half in an online account at 6.15% and the rest in a Term Deposit at 7.5% with the monthly interest redirected to the online account. Then I just transfer funds online to my thai account when needed, $22 to transfer and it usually clears in 48 hours.

you better check your online rate and report back again. there is no bank in Australia which pays 6.15% on short term cash when it can refinance at 4.85% interbank rate.

RUBBISH Naam. Rabo plus and a couple of others have been offering 6.15% for in excess of a month now. Theres a few others around 6% as well.

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Actually, I need to bring myself up with the current rates. Rabo is offering 6.4%, Ubank 6.26%, ING DIRECT 6.25, WPAC 6.2% & NAB 6%.

WPAC & NAB are two of Australias top 4 banks and both listed in the top 9 banks in the world.

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I leave my money in a Savings Account in Australia. I have half in an online account at 6.15% and the rest in a Term Deposit at 7.5% with the monthly interest redirected to the online account. Then I just transfer funds online to my thai account when needed, $22 to transfer and it usually clears in 48 hours.

you better check your online rate and report back again. there is no bank in Australia which pays 6.15% on short term cash when it can refinance at 4.85% interbank rate.

RUBBISH Naam. Rabo plus and a couple of others have been offering 6.15% for in excess of a month now. Theres a few others around 6% as well.

RUBBISH ND! 6.15% for what fixed term? definitely not for a savings account with immediate online access to the cash (as mentioned above).

note to my[not so]humble self: "it is unwise to discuss quantum mechanics with your gardener!" :)

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I leave my money in a Savings Account in Australia. I have half in an online account at 6.15% and the rest in a Term Deposit at 7.5% with the monthly interest redirected to the online account. Then I just transfer funds online to my thai account when needed, $22 to transfer and it usually clears in 48 hours.

you better check your online rate and report back again. there is no bank in Australia which pays 6.15% on short term cash when it can refinance at 4.85% interbank rate.

RUBBISH Naam. Rabo plus and a couple of others have been offering 6.15% for in excess of a month now. Theres a few others around 6% as well.

RUBBISH ND! 6.15% for what fixed term? definitely not for a savings account with immediate online access to the cash (as mentioned above).

note to my[not so]humble self: "it is unwise to discuss quantum mechanics with your gardener!" :D

Nope above 6.15% (see my latest post) for Savings account, cash on call. I thought my account was 6%, but the internet is telling me 6.2%.

If you want to check out some aussie rates Naam, I'll make it easy for you:-

ratecity.com.au

ps: Naam I would happily be you're gardner. :)

Edited by neverdie
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Nope above 6.15% (see my latest post) for Savings account, cash on call. I thought my account was 6%, but the internet is telling me 6.2%.

If you want to check out some aussie rates Naam, I'll make it easy for you:- ratecity.com.au

ps: Naam I would happily be you're gardner. :D

the usual bankster tricks ND. Rabo has a cap of AUD 50k, ING and Westpac state "promotional rate 4 months"... :)

p.s. my gardener is indeed happy. he is allowed to have sex with our maid.

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pps. our maid is his wife! :D

Edited by Naam
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I saw an advert for one of the thai banks, think bkk bank the other day and they were offering up to 5 or 6% if you left the funds in a certain account for over 37 months. I just cant remember the details now - old age, it must be really hard for poor ole Naam.

Yes, the ads say this, but if you go in and talk with them, and check the numbers, it actually works out at 1.1% per annum over 14 years. The ads are designed to be misleading.

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Just a quick comment on the issue of different interest rates for Thais and foreigners - which some people seem to be disputing.

Yes some banks have the same rate for both (for some or all of the accounts offered) ... but other banks don't.

This applies to both savings accounts and term deposit accounts ... so as always ... read the fine print

The following prior thread relates to term deposit accounts, and may be of interest to some readers:

Different Fixed Deposit Bank Interest Rates For Foreigners - Thailand Forum

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Nope above 6.15% (see my latest post) for Savings account, cash on call. I thought my account was 6%, but the internet is telling me 6.2%.

If you want to check out some aussie rates Naam, I'll make it easy for you:- ratecity.com.au

ps: Naam I would happily be you're gardner. :D

the usual bankster tricks ND. Rabo has a cap of AUD 50k, ING and Westpac state "promotional rate 4 months"... :)

p.s. my gardener is indeed happy. he is allowed to have sex with our maid.

.

pps. our maid is his wife! :D

Dear Naam,

First things first, I can tell you that regarding the promotional one, I have had that account for a couple of years and am still getting that rate. Theres ways of acheiving that without doing anything exception. Also, so what about the 50K cap. Also some of the eaccounts offer interest rates around the 6% marks as well, no conditions, no fees.

Anyway, I can assure you theres plenty of places to park you're at call money in Oz for rates better than that 4.85% you are dancing on.

:D .

Slightly off topic, I'm not sure you can afford me. :D

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I saw an advert for one of the thai banks, think bkk bank the other day and they were offering up to 5 or 6% if you left the funds in a certain account for over 37 months. I just cant remember the details now - old age, it must be really hard for poor ole Naam.

Yes, the ads say this, but if you go in and talk with them, and check the numbers, it actually works out at 1.1% per annum over 14 years. The ads are designed to be misleading.

that's exactly what poor ole Naam is trying to convey. bullshitting clients it is not limited to thai banksters but applies to all banksters worldwide. what young Neverdie is referring to is most probably a vehicle set up like a money market fund which might indeed pay 5% for a minimum period of three years during which the money can't be withdrawn. what the banksters avoid to tell the clients is that these MMFs contain also debt of low rated debtors which means risk compared to "real" cash.

av-11672.gif

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Anyway, I can assure you theres plenty of places to park you're at call money in Oz for rates better than that 4.85% you are dancing on.

i am not dancing on 4.85% but quote as a fact that this is the AUD interbank rate. and if somebody tells me that a bank is handing out 6.xx% to depositors even though it can borrow from other sources cheaper then logic dictates there is something fishy. and as far as financial institutions are concerned dozens of fishy possibilities exist. going into details is too time consuming and most probably of no interest to the participants here.

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I saw an advert for one of the thai banks, think bkk bank the other day and they were offering up to 5 or 6% if you left the funds in a certain account for over 37 months. I just cant remember the details now - old age, it must be really hard for poor ole Naam.

Yes, the ads say this, but if you go in and talk with them, and check the numbers, it actually works out at 1.1% per annum over 14 years. The ads are designed to be misleading.

that's exactly what poor ole Naam is trying to convey. bullshitting clients it is not limited to thai banksters but applies to all banksters worldwide. what young Neverdie is referring to is most probably a vehicle set up like a money market fund which might indeed pay 5% for a minimum period of three years during which the money can't be withdrawn. what the banksters avoid to tell the clients is that these MMFs contain also debt of low rated debtors which means risk compared to "real" cash.

av-11672.gif

No Naam, what I am talking about is 'at call' cash savings and 'e' accounts in Australian Banks. The Thai Bank rate I was referring to earlier required you to leave funds in the account for varying periods of time, the cash was always at call and the interest rate started at 1.5% (or something) & gradually went up every six months to a maxium of (around 6%) after the cash had been in the account for 37 months. As I wasnt that interested in the Thai account, I didnt bother asking too many questions.

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