Bank Savings Interest Rates

[fletchsmile]

Okay, so I have to ask for your opinions. Following an informative post in this thread I went to the TMB. The TMB's 2.83% account had a catch: I would have had to pay taxes, resulting in an overall less than 2% interest. So instead, a few days ago I opened up a "TMB No Fixed Account" which pays out exactly 2% twice a year without any taxes whatsoever. The account has no fixed time frame and I can withdraw my money anytime or keep the account for years on end (of course always watching out if there's a change in the interest rate).

My question is: Is 2.0% interest a good deal, or should I have looked around more?

no fixed account interest 2% paid twice a yr.but surely you must maintain a certain balance,normally around 500,000bht.

No minimum amount. "No fixed" is supposed to mean that there is no fixed term. The 2% actually includes a bonus of 0.5% which you get if you increase your balance each month

"NO FIXED" for sure means a variable rate, so it's pretty sure to be an opening offer which will change within a few months.

It's exactly as I said. Yes it's confusing to a native English speaker as we expect it to mean the rate isn't fixed, but variable.

However, their concept and the reason it was named this way is that it's a good rate that you don't to lock away money for a fixed term. Hence "no fixed" (term) is how they describe and market it. A good interest rate without needing to lock away your money. This was confirmed to me first hand by senior people within the bank who developed the product.

No, it's not an opening offer. This is a core product for them. They differentiate their deposits between "for use" (their words not mine meaning purpose = used for making transactions) and "for save" (their words again meaning purpose = for saving at a good rate). they tend to pay very competitive rates on their "for save" deposit products as part of their strategy.

So in the same way they have the ME brand for Thais, this is a deposit product that will be around as a core part of their strategy.

Cheers

Fletch

[jpinx]

Nice take on the terminology, but experience has shown that if the term is not fixed - neither is the rate. Mee Tae Dai was marketed at a nice rate to start with -- but that didn't last long

[fletchsmile]

Nice take on the terminology, but experience has shown that if the term is not fixed - neither is the rate. Mee Tae Dai was marketed at a nice rate to start with -- but that didn't last long

The "no fixed" account is indeed pays a variable rate and will go up and down with interest rates. Just explaining why it's called what it is and the bank's thinking and strategy. The rate has been competitive over the last couple of years and should continue to be so in the context of the banks strategy.

mee tae dee is similar to an extent to SCBT's Marathan accounts. For the type of account it is: restricted withdrawals savings account, it's still a reasonably competitive rate as is SCBTs. The problem is interest rates have come down a lot in recent years combined with no real need to compete for deposits given were the banking sector s in terms of liquidity and loan demand. If you compare it to other basic savings accounts that are not fixed rate deposits it will still stack up relatively quite well

Edited September 11, 2015 by fletchsmile

[Pib]

Nice take on the terminology, but experience has shown that if the term is not fixed - neither is the rate. Mee Tae Dai was marketed at a nice rate to start with -- but that didn't last long

Rates have went down for all types of accounts....and yeap, the Krungsri MTD has went down also. But it's still paying 1.8% for the Bt100K to Bt10M range with the ability to withdraw funds at any time without any interest penalty, 2 free withdrawals a month with only a Bt50 fee for 3 or more withdrawals per month and no tax as long as not exceeding Bt20K interest earned per year while regular savings accounts are only paying in the 0.5% ballpark. Still a good deal in comparison to a regular savings account and even in interest earned comparison to many fixed savings accounts with their interest penalties for early withdrawals and 15% withholding tax on interest earned which then requires a tax form filing to get that 15% refunded.

Heck, I'm seriously thinking that when a current Bangkok Bank 2.8% fixed account matures in a few months I'll just transfer that money to my current Krungsri MTD and/or open another MTD account to put that money into to avoid hitting that Bt20K interest earned per year trigger point and triggering a tax withholding. But I'll wait and see what Bangkok Bank has fixed account-wise in a few months...but from based on what they are offering right now as shown in below snapshot they are probably not going to have anything that interests me....heck even their 10 month fixed account it only pays 1.625%...less than the more flexible Krungsri MTD 1.8% savings account. Interest rates paid now days for many fixed accounts has went down so much I may just opt to go with my Krungsri MTD account for the bulk of my savings in Thailand to still get a fairly good interest rate, have money withdrawal flexibility without penalty, and just avoid the yearly tax refund filing thing.

Edited September 11, 2015 by Pib

[TallGuyJohninBKK]

Had this in my email tonight from Standard Chartered:

[Stan42]

Thanks for all the feedback. A poster already explained why the 2.83% was a no go.

Yes, I also expect the interest rate to change over time.

Seeing the other rates, 2% sounds fair enough.

I guess I'll keep my money there until the rate drops below 1.5% then transfer it to whatever bank will have promotion at that time.

One last question (Treat me like a newbie):

-They said interest rate is calculated daily

-They said interest is payed every 6 months

Let's say I have 100thb, does this mean I get 2thb every 6 months? Or does the payed amount accumulate per month (which would result in 2x6= 12thb every 6 months)?

[sandmike]

I read that as your 100thb would accrue 2 baht per year (at 2% pa).. so 1 baht after 6 months ....

Sent by carrier pigeon

[fletchsmile]

Thanks for all the feedback. A poster already explained why the 2.83% was a no go.

Yes, I also expect the interest rate to change over time.

Seeing the other rates, 2% sounds fair enough.

I guess I'll keep my money there until the rate drops below 1.5% then transfer it to whatever bank will have promotion at that time.

One last question (Treat me like a newbie):

-They said interest rate is calculated daily

-They said interest is payed every 6 months

Let's say I have 100thb, does this mean I get 2thb every 6 months? Or does the payed amount accumulate per month (which would result in 2x6= 12thb every 6 months)?

2% is an annual rate. The interest will be calculated using this annual rate applied to the balance on your account each day.

If 2% is the annual rate quoted then for 6 months/ half a year you'll get approx 1%. (actual number days/365 x 2%) if you started your account on first day of year

So if your balance is 100 baht and doesn't change you'll get 1 baht after 6 months on your 100 baht if you open on first day of the year.

After that you'll have 101 baht in your account and this will then earn interest so next time 6 months later you'll get 1.01 baht. (as interest compounds). This is the most common method.

Actually if you took out on 30 Sep and interest is paid based on 30 June and 31 Dec, then you'd get (31+30+31)/365 * 2% up to December. So you'll have a short first period of 3 months until first int payment date of 31 Dec. Then normal 6 months until next date of 30 June and thereafter etc

Edited September 16, 2015 by fletchsmile

[jpinx]

Krungsri Bank today had a notice on the screen in the branch showing the STEP DEPOSIT rate at 2.55%.

Link here...

https://www.krungsri.com/bank/en/PersonalBanking/DepositProducts/SavingsDeposit/Specialsavings.html

but not sure where the rates for that one are on the English version of the website.

[12DrinkMore]

Krungsri Bank today had a notice on the screen in the branch showing the STEP DEPOSIT rate at 2.55%.

Link here...

https://www.krungsri.com/bank/en/PersonalBanking/DepositProducts/SavingsDeposit/Specialsavings.html

but not sure where the rates for that one are on the English version of the website.

Marketing blah.

The maximum for the last few months is 2.55%

The average over the term is 2.01%.

https://www.krungsri.com/bank/getmedia/4e62ceab-9934-40cc-aa7c-cb4df3c7fe7c/Deposit-Rates-10092015.aspx

[jpinx]

Krungsri Bank today had a notice on the screen in the branch showing the STEP DEPOSIT rate at 2.55%.

Link here...

https://www.krungsri.com/bank/en/PersonalBanking/DepositProducts/SavingsDeposit/Specialsavings.html

but not sure where the rates for that one are on the English version of the website.

Marketing blah.

The maximum for the last few months is 2.55%

The average over the term is 2.01%.

https://www.krungsri.com/bank/getmedia/4e62ceab-9934-40cc-aa7c-cb4df3c7fe7c/Deposit-Rates-10092015.aspx

Thought as much - but some folks like to have the info - so I posted it

[scooterboy]

The average over the term is 2.01%.

Without knowing (yet) the length of deposit, it still sounds quite reasonable at the moment - if this is tax-free, that is.

Unfortunately, no Krungsri where I live (and not much else, either!).

The best I can get here just now is 1.93% (tax-free) for 8 months.

Oh...and from October only 1.55%........

Edited September 16, 2015 by scooterboy

[meatboy]

The average over the term is 2.01%.

Without knowing (yet) the length of deposit, it still sounds quite reasonable at the moment - if this is tax-free, that is.

Unfortunately, no Krungsri where I live (and not much else, either!).

The best I can get here just now is 1.93% (tax-free) for 8 months.

Oh...and from October only 1.55%........

step deposits with fixed rates are TAXED at 15%.but you can claim it back.

[Henryford]

The average over the term is 2.01%.

Without knowing (yet) the length of deposit, it still sounds quite reasonable at the moment - if this is tax-free, that is.

Unfortunately, no Krungsri where I live (and not much else, either!).

The best I can get here just now is 1.93% (tax-free) for 8 months.

Oh...and from October only 1.55%........

step deposits with fixed rates are TAXED at 15%.but you can claim it back.

What's the limit on claiming back tax. I hope to have interest income of @ 45,000 baht some of which will probably be taxed. I have no other thai income. I presume i can claim back any tax deducted.

[12DrinkMore]

The average over the term is 2.01%.

Without knowing (yet) the length of deposit, it still sounds quite reasonable at the moment - if this is tax-free, that is.

Unfortunately, no Krungsri where I live (and not much else, either!).

The best I can get here just now is 1.93% (tax-free) for 8 months.

Oh...and from October only 1.55%........

step deposits with fixed rates are TAXED at 15%.but you can claim it back.

What's the limit on claiming back tax. I hope to have interest income of @ 45,000 baht some of which will probably be taxed. I have no other thai income. I presume i can claim back any tax deducted.

You are well within the limit.

In January go around the banks and collect the statements of interest earned and tax paid.

Pop over to the local friendly tax department, get a tax ID, and then they will fill the form in for you.

The first year I received a letter so I had to revisit the tax department basically just to say hello.

A short while afterwards a check comes through the post.

Subsequent years they send the tax forms to you, just take them to the office and have the nice lady fill them in. (Seems like all these government offices are manned by females, I wonder why?)

Edited September 17, 2015 by 12DrinkMore

[chiang mai]

The average over the term is 2.01%.

Without knowing (yet) the length of deposit, it still sounds quite reasonable at the moment - if this is tax-free, that is.

Unfortunately, no Krungsri where I live (and not much else, either!).

The best I can get here just now is 1.93% (tax-free) for 8 months.

Oh...and from October only 1.55%........

step deposits with fixed rates are TAXED at 15%.but you can claim it back.

What's the limit on claiming back tax. I hope to have interest income of @ 45,000 baht some of which will probably be taxed. I have no other thai income. I presume i can claim back any tax deducted.

The first 150k of income is tax free, the next 150k attracts 5% tax and on a scale upwards from there, here's the tax tables.

http://www.rd.go.th/publish/6045.0.html

[HampiK]

The first 150k of income is tax free, the next 150k attracts 5% tax and on a scale upwards from there, here's the tax tables.

http://www.rd.go.th/publish/6045.0.html

Thank you very much. Now I learned something new.

If I understand you right, then i can ask for return of my 15% deductable of my Interest rate, and then have to pay 0 - x% of tax according to how much interest amount I had. That sounds nice.

Something more I have to consider when I live there permanent. At the moment I become 10% of this tax back from my country where I pay tax. It's a little bit effort to collect all papers and then give to the according departement in Swiss.. but still worth the effort. Except the interest rate go down and down.

I remember in the begining I had about 3.5% Interest rate, now i am on 1.7 - 2.0% and scare I will go down even more.

[chiang mai]

The first 150k of income is tax free, the next 150k attracts 5% tax and on a scale upwards from there, here's the tax tables.

http://www.rd.go.th/publish/6045.0.html

Thank you very much. Now I learned something new.

If I understand you right, then i can ask for return of my 15% deductable of my Interest rate, and then have to pay 0 - x% of tax according to how much interest amount I had. That sounds nice.

Something more I have to consider when I live there permanent. At the moment I become 10% of this tax back from my country where I pay tax. It's a little bit effort to collect all papers and then give to the according departement in Swiss.. but still worth the effort. Except the interest rate go down and down.

I remember in the begining I had about 3.5% Interest rate, now i am on 1.7 - 2.0% and scare I will go down even more.

No, you pay the 15% tax and then reclaim it in January of each year from the Thai tax authorities, that may sound like hard work but it's a very easy and quick process. Between January and March of each year simply visit your bank and ask for certificates of interest paid and tax with held. Take those to your local tax office, register for a tax ID (first year only) and give them the forms provided by your bank(s). They will fill out the forms for you (fifteen minutes) and provide a receipt, a cheque arrives in the mail about four weeks later. Odd as it may seem, the Thai tax people are some of the most friendly and efficient of any government agency and the tax offices are always empty with loads of staff to help you, this is because hardly anyone pays tax in Thailand (only 2% of the population pay tax via payroll deductions).

[Boycie]

LH Bank fixed deposit, step up to 7%

2.3% over the 15 month term

[smacko]

in regards to the 15% withholding tax on interest earned about 20k thb annual.

Is this per account, per customer, bank, branch or what exactly?

if its only per account, i can just keep opening more accounts as i get closer to the 20k thb each year...

another stupid question, the interest is per thai financial calendar year, when is that?

[12DrinkMore]

in regards to the 15% withholding tax on interest earned about 20k thb annual.

Is this per account, per customer, bank, branch or what exactly?

if its only per account, i can just keep opening more accounts as i get closer to the 20k thb each year...

another stupid question, the interest is per thai financial calendar year, when is that?

The 15% withholding tax depends on the type of account.

The interest on normal deposit accounts is not taxed below a total interest of THB 20,000. But they hardly pay any interest.

Fixed accounts and generally higher interest accounts are subject to 15% tax, irrespective of how much interest you earn.

But a very few special accounts are not subject to the tax.

The Thai tax year is the same as the calendar year.

[smacko]

The 15% withholding tax depends on the type of account.

The interest on normal deposit accounts is not taxed below a total interest of THB 20,000. But they hardly pay any interest.

Fixed accounts and generally higher interest accounts are subject to 15% tax, irrespective of how much interest you earn.

But a very few special accounts are not subject to the tax.

The Thai tax year is the same as the calendar year.

I opened a krungsri account that has a rate of 1.8% on deposits above 100k. The bank employee did mention 15% tax withholding on interest earned above 20k. Was wondering if opening a new account buys me another 20k before tax.

[55Jay]

The 15% withholding tax depends on the type of account.

The interest on normal deposit accounts is not taxed below a total interest of THB 20,000. But they hardly pay any interest.

Fixed accounts and generally higher interest accounts are subject to 15% tax, irrespective of how much interest you earn.

But a very few special accounts are not subject to the tax.

The Thai tax year is the same as the calendar year.

I opened a krungsri account that has a rate of 1.8% on deposits above 100k. The bank employee did mention 15% tax withholding on interest earned above 20k. Was wondering if opening a new account buys me another 20k before tax.

Yes. I've got 2 and track each 20k ceiling individually.

[regedit]

in regards to the 15% withholding tax on interest earned about 20k thb annual.

Is this per account, per customer, bank, branch or what exactly?

If the bank branch detects that your accounts with them have earned (not necessarily paid out) more than 20,000 baht (in total) then they are likely to start asking for your tax id. If you don't provide it they can deduct 15% WHT on all future interest payments. Note the word "branch"...

[55Jay]

Getting off topic but I've got two Krung Si MTD accounts, opened same time, same branch.

Last year, both accounts combined exceeded 20k Baht interest but that did not trigger any tax withholding.

As advertised, and demonstrated in my case, it's 20k per account per calendar year.

Edit: Yes, one of the two accts was on track to exceed 20k by September so the branch manager closed it and opened a new one.

Edited September 23, 2015 by 55Jay

[macahoom]

in regards to the 15% withholding tax on interest earned about 20k thb annual.

Is this per account, per customer, bank, branch or what exactly?

If the bank branch detects that your accounts with them have earned (not necessarily paid out) more than 20,000 baht (in total) then they are likely to start asking for your tax id. If you don't provide it they can deduct 15% WHT on all future interest payments. Note the word "branch"...

Not in my experience:

I have several accounts in one branch each designed so it will not earn more than 20k per year, interest.

The bank suggested I do this so I wouldn't have to pay the 15%.

And, I have another bank who phone me to tell me I'm about to hit the 20k threshold and I should come in and close the account and open a new one!

[chiang mai]

in regards to the 15% withholding tax on interest earned about 20k thb annual.

Is this per account, per customer, bank, branch or what exactly?

If the bank branch detects that your accounts with them have earned (not necessarily paid out) more than 20,000 baht (in total) then they are likely to start asking for your tax id. If you don't provide it they can deduct 15% WHT on all future interest payments. Note the word "branch"...

No, not all, the Thai banks don't operate that way, they actively canvas customers to open multiple accounts to avoid paying tax.

[chiang mai]

The 15% withholding tax depends on the type of account.

The interest on normal deposit accounts is not taxed below a total interest of THB 20,000. But they hardly pay any interest.

Fixed accounts and generally higher interest accounts are subject to 15% tax, irrespective of how much interest you earn.

But a very few special accounts are not subject to the tax.

The Thai tax year is the same as the calendar year.

I opened a krungsri account that has a rate of 1.8% on deposits above 100k. The bank employee did mention 15% tax withholding on interest earned above 20k. Was wondering if opening a new account buys me another 20k before tax.

Yes it does.

[AyG]

Surely you're required to report interest and tax deducted (or not) on your annual tax return. If you have multiple accounts and you don't, then you are a criminal.

Sent from my Nexus 7 using Thaivisa Connect Thailand mobile app

[chiang mai]

Correct.