Bangkok Bank Raises Fixed Deposit Interest Rates

[webfact]

Bangkok Bank raises fixed deposit interest rates

BANGKOK (NNT) -- Bangkok Bank Public Company Limited has announced an increase of its fixed deposit interest rates, effective immediately.

From 29 September 2010 onwards, Bangkok Bank's fixed deposit interest rates are as follows:

The 3-month fixed deposit interest rate stands at 1.00%, up from 0.875%.

The 6-month fixed deposit interest rate stands at 1.125-1.25%, up from 1.00%.

The 12-month fixed deposit interest rate stands at 1.25-1.50%, up from 1.00%.

The 24-month fixed deposit interest rate stands at 2.00-2.25%, up from 1.75%.

The 36-month fixed deposit interest rate stands at 2.25%, up from 2.00%.

-- NNT 2010-09-29

[Pib]

Alright!!! I'll be able to live comfortably now off the interest paid on my savings account. Well, actually, this interest increase will probably buy me one more Chang beer per month.

[rgs2001uk]

I must be missing something here, perhaps the financial gurus could explain.

Why would anyone take out anything more than a 3 month term deposit that pays 1%

If I took out one and it expires after 3 months does it pay 1%?

If so if I then invested it for another 3 months is that another 1%, that would mean I could in theory invest the same amount of money for 4 three month terms and get 4% for a year.

Or is this a case of slick advertising where in fact the 3 month deposit earns 0.25% for 3 months but 1% if invested for a full one year?

[Pib]

That 1% (and the other quoted rates) is on an "annual" basis...you don't get 1% more if only leaving the money deposited for 3 months...you would really only get approximately 0.25% more as 3 months is one-fourth of a year.

Standard interest rate smoke-and-mirrors used by all banks. Plus, be sure to read the fine print which will probably only be provided in Thai.

[cmsally]

Wasn't the inflation rate so far this year announced as around 3.4%

That means something like one step backwards and another even further back.

[aurelius]

At least a rate quoted as an annual percentage amount allows for a transparent comparison between various terms.

[thrilled]

I understand siam commercial bank is around 5% for 24 months

[Naam]

I understand siam commercial bank is around 5% for 24 months

some years ago it was.

[backsoon]

That 1% (and the other quoted rates) is on an "annual" basis...you don't get 1% more if only leaving the money deposited for 3 months...you would really only get approximately 0.25% more as 3 months is one-fourth of a year.

Standard interest rate smoke-and-mirrors used by all banks. Plus, be sure to read the fine print which will probably only be provided in Thai.

Correct only to a point. 1% or the wopping 2% p/a with correction for TIT reads 'per anus'

[ianguygil]

I understand siam commercial bank is around 5% for 24 months

some years ago it was.

Correct. It is not fixed at 5% for 24 months.

I think they have some kind of "tiered" interest rate, and the 5% applies for the last couple of months. We just had something similar. So the effective APR for the SCB offer is much lower than 5%, but the 5% is just at the tail end of it.

As for the comment by another poster about the interest rates being negative relative to inflation. I think that is true of all major economies pretty much except Japan (which has deflation) and Australia. Definitely in the US the CD rates are lower than inflation.

[longstebe]

So you would need a good 10 mil to be able to live off your interest?

[meom]

10 mil baht would give you only 225,000/year out which the bank would take another 15% tax so you're left with a little over 190,000.

Without touching the principal you would have to be really frugal to be able to live on that for a whole year.

[ianguygil]

10 mil baht would give you only 225,000/year out which the bank would take another 15% tax so you're left with a little over 190,000.

Without touching the principal you would have to be really frugal to be able to live on that for a whole year.

Correct. The Bank would take the tax and give it to the Government. It was not actually clear to me if the poster meant 10 Million THB, USD or maybe Lao Kip .

Just to restate again. Banks around the world are offering low interest rates because central banks are keeping their rates so low. There is a direct relationship (especially with shorter maturities). So for posters to be critical of an individual bank, or all banks in a particular country, makes no sense. Central Banks are pushing rates down to try to accomodate the recovery. Even though the Bank of Thailand is progressively increasing them, albeit slowly. And as a result banks are slowly increasing their rates in Thailand.

[Chunky1]

Hmmm... I wonder why the real estate market is so booming? Why invest at 1% when you can make an easy 10, 20, 30 or maybe 40% profit in the next year year by picking up the latest condo. Yes, 15m is expensive for 100m but this is easy money my friend.

[chiang mai]

3% net instant on GBP in the IOM is not difficult to achieve so why bother with BB, unless you want to speculate on the currency of course.