Siam Commercial Timed Deposit

[husky]

The Timed Deposit for 12 months today yields 3.8 %. There is a disclaimer on the information sheet at the top: 'Investing in this has risk. The investor should educate himself/herself to the risks involved prior to investing'. There is also a section which shows various securities. When I asked them about the statement of risk the bank said they need to put that on there to satisfy legal requirements but the investments are extremely safe and there has never been a case when at maturity the principal + interest wasn't returned.

It strikes me that it is very similar to a 'money market' fund in the US or abroad, which is priced at a stable price and then almost always holds that value (although there have been some exceptions).

So, my question is, is the money market comparison valid. Are these investments 'ultra safe' with the risk statement just a cover all?

[Naam]

So, my question is, is the money market comparison valid. Are these investments 'ultra safe' with the risk statement just a cover all?

if it is a money market fund the risk involved is that one of the debtors defaults. depending on the selection of debtors and their ratings the risk can be quantified. but ultimately there is no "ultra safe" investment even when you have cash in the bank. if the bank goes belly-up your cash is (pro rata) gone.

There is also a section which shows various securities.

indicates clearly a money market fund and NOT a time deposit. MMFs have the advantage that in Thailand the yield is paid free of withholding tax. time deposits and call money is taxed. don't ask me why.

Edited December 29, 2011 by Naam

[fletchsmile]

The first risk everyone thinks of is counter-party credit risk - the bank goes bust and you don't get your money back. But there's a whole load of others. Naming a few:

Depending on your funding and where the money comes from (if overseas) you might also have currency risk, as if say USD is important to you it fluctuates

Interest rate risk - the risk rates rise and you miss out because your're locked in.

Liquidity risk - put too much in and you get caught and can't meet your liabilities or day to day expenses, as you can't get at your assets.

Systemic banking risk - banking sector collapses and you get caught up in the mess and game of dominoes

Re-investment or repricing risk - what will the rates be when you get your money back visa interest payments and your capital matures, will they have dropped

Inflation risk - will it keep pace with inflation or produce negative real returns

Sovereign risk - deposits are guaranteed, but what happens if the country and guarantor fail together with your bank.

etc

No investment is ever risk free...

Not my idea of "ultra safe", but "reasonably safe"

[benno]

Why do you need to bring your savings here??? What about Hong Kong HSBC?? Your home country?

Just wonder , 3,8%, 3,2%. Does it matter against inflation here, which is running amok now. Keep it safe, and keep it yours. Or try Goa, and forget about your cash straight away.

Good luck with your romance.