Bank Savings Interest Rates

[chiang mai]

Life insurers offer savings plan. Bangkok Life, for instance, sold savings plan with interest rate (IRR) of 4% p.a. last and this year for a limited promotion period. Now, seems to be 3.75% (their English website provides little info though).

Pays out sum of premium in case of loss of life. Bought 100k last year, which returns 4% every year over the coverage period of 5 yr. During 5 yr, if I pass away, my beneficiary receives 100k. Period for premium payment was just a single year, hence no need to commit contributing over several years.

Effectively like 5 yr deposit with 4% interest but no compound (no leverage as life insurance, though). Free from 15% withholding tax on 4% 'interest', cause ain't no bank deposit.

Premium is tax deductible up to 100k p.a., should you pay personal income tax. Of course you can buy more, if you want.

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

More like deposit than insurance. So, didn't post onto insurance thread.

Make no mistake that is an insurance product. Mrs CM got he hard sell on one of these earlier this year but by the time we'd done the math we quickly realized that a regular deposit account was a far better deal. They are not dissimilar to endowment policies that were heavily sold in the UK during the 1980's where the only way you could win financially is to die early! If in doubt, sit down with a calculator and work out the return on capital employed.

[chiang mai]

A useful piece in the Independent this morning where Carney suggests that UK interest rates will be at 2.5% in three years time. If that's correct it remains difficult to believe that banks will offer much of a premium on this since simply because there's so much cash floating around and they don't need to attract more. If all of that is true, it's unlikely that UK savings rates will exceed 3% in three years time.

http://www.independent.co.uk/money/mortgages/mark-carney-interest-rates-will-rise-to-25-within-three-years-9568907.html

[ThaiLife]

Any one recently seen any decent offers / promotions / rates from a Thai bank ?

TL

[scatalyst]

I just now see that Bangkok Bank has added a 7-month Fixed Deposit account paying 2.5%. So now they are advertising three Fixed Deposit options:

4-month Fixed Deposit, Interest Rate 2.00%, Minimum Deposit 200,000 Baht

7-month Fixed Deposit, Interest Rate 2.50%, Minimum Deposit 200,00 Baht

11-month Fixed Deposit, Interest Rate 2.80%, Minimum Deposit 100,000 Baht (but the funds used to open the 11-month account cannot be withdrawn or transferred from an existing Bangkok Bank account)

[chiang mai]

I just now see that Bangkok Bank has added a 7-month Fixed Deposit account paying 2.5%. So now they are advertising three Fixed Deposit options:

4-month Fixed Deposit, Interest Rate 2.00%, Minimum Deposit 200,000 Baht

7-month Fixed Deposit, Interest Rate 2.50%, Minimum Deposit 200,00 Baht

11-month Fixed Deposit, Interest Rate 2.80%, Minimum Deposit 100,000 Baht (but the funds used to open the 11-month account cannot be withdrawn or transferred from an existing Bangkok Bank account)

So the 11 month deal needs new money, that's becoming fairly common these days.

Also, something to watch out for is a nasty little trick that's written into the fine print whereby they pay you all the interest on the day the account is opened, that seems like a good idea because you can then reinvest that interest and get double dip. BUT, you can't withdraw the principle for the duration of the fix, it makes the account useless for Immigration visa purposes.

[scatalyst]

I just now see that Bangkok Bank has added a 7-month Fixed Deposit account paying 2.5%. So now they are advertising three Fixed Deposit options:

4-month Fixed Deposit, Interest Rate 2.00%, Minimum Deposit 200,000 Baht

7-month Fixed Deposit, Interest Rate 2.50%, Minimum Deposit 200,00 Baht

11-month Fixed Deposit, Interest Rate 2.80%, Minimum Deposit 100,000 Baht (but the funds used to open the 11-month account cannot be withdrawn or transferred from an existing Bangkok Bank account)

So the 11 month deal needs new money, that's becoming fairly common these days.

Also, something to watch out for is a nasty little trick that's written into the fine print whereby they pay you all the interest on the day the account is opened, that seems like a good idea because you can then reinvest that interest and get double dip. BUT, you can't withdraw the principle for the duration of the fix, it makes the account useless for Immigration visa purposes.

Hey, CM, thanks for the heads-up about the interest trick that would invalidate the money for immigration (retirement). That's the purpose of my accounts, so I'll definitely be watching out for it.

I just checked for these three Bangkok Bank fixed accounts and it specifically says, "the bank will pay interest upon maturity" and then under the conditions, it lists specific penalties for early withdrawal. So it looks to me like any of these are okay for my "immigration" money. I just have to get the timing right as far as the seasoning period is concerned.

And thanks for starting this thread, by the way. I just found it recently but now I check it regularly.

[chiang mai]

I just now see that Bangkok Bank has added a 7-month Fixed Deposit account paying 2.5%. So now they are advertising three Fixed Deposit options:

4-month Fixed Deposit, Interest Rate 2.00%, Minimum Deposit 200,000 Baht

7-month Fixed Deposit, Interest Rate 2.50%, Minimum Deposit 200,00 Baht

11-month Fixed Deposit, Interest Rate 2.80%, Minimum Deposit 100,000 Baht (but the funds used to open the 11-month account cannot be withdrawn or transferred from an existing Bangkok Bank account)

So the 11 month deal needs new money, that's becoming fairly common these days.

Also, something to watch out for is a nasty little trick that's written into the fine print whereby they pay you all the interest on the day the account is opened, that seems like a good idea because you can then reinvest that interest and get double dip. BUT, you can't withdraw the principle for the duration of the fix, it makes the account useless for Immigration visa purposes.

Hey, CM, thanks for the heads-up about the interest trick that would invalidate the money for immigration (retirement). That's the purpose of my accounts, so I'll definitely be watching out for it.

I just checked for these three Bangkok Bank fixed accounts and it specifically says, "the bank will pay interest upon maturity" and then under the conditions, it lists specific penalties for early withdrawal. So it looks to me like any of these are okay for my "immigration" money. I just have to get the timing right as far as the seasoning period is concerned.

And thanks for starting this thread, by the way. I just found it recently but now I check it regularly.

Alarm bells are ringing!

Paying interest at maturity indicates that the interest calculation is simple interest, typically interest on fixed deposits is paid monthly and paid into a separate savings account - I have never heard of a Thai bank bank paying interest at maturity on a fixed rate deposit, maybe it's a new trend!

Anyone?.

[Tywais]

Alarm bells are ringing!

Paying interest at maturity indicates that the interest calculation is simple interest, typically interest on fixed deposits is paid monthly and paid into a separate savings account - I have never heard of a Thai bank bank paying interest at maturity on a fixed rate deposit, maybe it's a new trend!

Anyone?.

Pretty much all fixed deposit accounts I've had or familiar with pay interest at maturity. That is with Bangkok Bank and I've had quite a few fixed deposit accounts with them. No alarm bells as seems pretty standard. Difficult to find an account I thought that compounded interest.

At maturity they ask if I wish to roll over the interest into the next fixed deposit account I open or put it into my savings account.

[meatboy]

Alarm bells are ringing!

Paying interest at maturity indicates that the interest calculation is simple interest, typically interest on fixed deposits is paid monthly and paid into a separate savings account - I have never heard of a Thai bank bank paying interest at maturity on a fixed rate deposit, maybe it's a new trend!

Anyone?.

Pretty much all fixed deposit accounts I've had or familiar with pay interest at maturity. That is with Bangkok Bank and I've had quite a few fixed deposit accounts with them. No alarm bells as seems pretty standard. Difficult to find an account I thought that compounded interest.

At maturity they ask if I wish to roll over the interest into the next fixed deposit account I open or put it into my savings account.

all mine and the wife with bkk.bank have been interest on maturity,the same with scb,and tgsb,but LH.which we have 2x15months x 3.5%,3.2%. interest is paid monthly into a separate acc.paying 2% up to 500k.

[chiang mai]

Alarm bells are ringing!

Paying interest at maturity indicates that the interest calculation is simple interest, typically interest on fixed deposits is paid monthly and paid into a separate savings account - I have never heard of a Thai bank bank paying interest at maturity on a fixed rate deposit, maybe it's a new trend!

Anyone?.

Pretty much all fixed deposit accounts I've had or familiar with pay interest at maturity. That is with Bangkok Bank and I've had quite a few fixed deposit accounts with them. No alarm bells as seems pretty standard. Difficult to find an account I thought that compounded interest.

At maturity they ask if I wish to roll over the interest into the next fixed deposit account I open or put it into my savings account.

BAY accounts compound their interest on a daily basis, as do other banks.

I have had in the region of fifty or more fixed deposit accounts in Thailand over the past ten years or so, none of them have been on the basis of interest at maturity. Interest is always taken monthly and reinvested. Whilst that is not true compound interest it is a vast improvement over simple interest.

[chiang mai]

Alarm bells are ringing!

Paying interest at maturity indicates that the interest calculation is simple interest, typically interest on fixed deposits is paid monthly and paid into a separate savings account - I have never heard of a Thai bank bank paying interest at maturity on a fixed rate deposit, maybe it's a new trend!

Anyone?.

Pretty much all fixed deposit accounts I've had or familiar with pay interest at maturity. That is with Bangkok Bank and I've had quite a few fixed deposit accounts with them. No alarm bells as seems pretty standard. Difficult to find an account I thought that compounded interest.

At maturity they ask if I wish to roll over the interest into the next fixed deposit account I open or put it into my savings account.

all mine and the wife with bkk.bank have been interest on maturity,the same with scb,and tgsb,but LH.which we have 2x15months x 3.5%,3.2%. interest is paid monthly into a separate acc.paying 2% up to 500k.

Ah, the significant point is, I think maybe, the banks in Thailand I bank with are UOB and CIMB, both are not native Thai banks.

[mania]

BAY accounts compound their interest on a daily basis, as do other banks.

I have had in the region of fifty or more fixed deposit accounts in Thailand over the past ten years or so, none of them have been on the basis of interest at maturity. Interest is always taken monthly and reinvested. Whilst that is not true compound interest it is a vast improvement over simple interest.

This is my main reason for liking them ....well also the non fixed status makes the account liquid & usable for Immigration

But the compounding is something caught my eye when they 1st opened these a few years back.

I had previously had SCB & BKB fixed accounts years ago which only paid interest bi annually & based on starting amount at

start of each of the two interest payments sections.

Edited August 22, 2014 by mania

[Jack Mountain]

That you have to use new money is not completely true, you can use the money you have on a savings account at the branch

where you want to open the 11-months deposit as long as it's not deposited there from another Bangkok Bank branch.

I did it a few weeks ago ... no problem.

[chiang mai]

That you have to use new money is not completely true, you can use the money you have on a savings account at the branch

where you want to open the 11-months deposit as long as it's not deposited there from another Bangkok Bank branch.

I did it a few weeks ago ... no problem.

Old money can be new money, depends how badly the bank want your deposit, for me that would be one of many small warning flags that build to make a picture on overall bank risk/desperation, higher than normal interest rates would be another. Nothing intended by all of that, merely my observations and views.

[Ling Kae]

That you have to use new money is not completely true, you can use the money you have on a savings account at the branch

where you want to open the 11-months deposit as long as it's not deposited there from another Bangkok Bank branch.

I did it a few weeks ago ... no problem.

I did this just last week. I had money in my Bankok Bank regular Savings account. Saw the sign say 2.8% for 11 Months so I asked the lady can I do that? Yes no pronlem, so locked it up at that rate, no problems.

[Pib]

I've had about a half dozen Bangkok Bank fixed accounts and they all paid the interest on maturity; not monthly, not on day one, etc. Several posts above where the Bangkok Bank 4, 7, and 11 month fixed accounts are talked about, I just looked at the Bangkok Bank webpage on these products and it says they pay interest on maturity. See below for a cut and paste from their webpage regarding the products....look at the 3d bullets under Conditions regarding when interest is paid.

There are many "fixed-type" accounts at various Thai banks and many come with different conditions/rules...always ensure you understand the fine print.

Edited August 23, 2014 by Pib

[chiang mai]

I wonder how many people bother to ask whether or not they are able to have the interest paid away monthly, I also wonder how many people understand the difference between simple and compound interest. All my fixed accounts are with UOB and CIMB whilst my savings accounts are with UOB and BAY, the former pays 2.5% tax free and compounds interest daily, the effect of paying away the fixed account interest into such an account every month increases the yield quite substantially, food for thought perhaps. To be honest, if a bank said I could only get interest at maturity on a simple interest basis, I wouldn't bank with them.

Edited August 23, 2014 by chiang mai

[scatalyst]

I also wonder how many people understand the difference between simple and compound interest.

Didn't want to clutter this topic, so I just started a new thread asking for an explanation and example to better understand the differences. Would appreciate your input there.

[Billy The Kid]

I've had about a half dozen Bangkok Bank fixed accounts and they all paid the interest on maturity; not monthly, not on day one, etc. Several posts above where the Bangkok Bank 4, 7, and 11 month fixed accounts are talked about, I just looked at the Bangkok Bank webpage on these products and it says they pay interest on maturity. See below for a cut and paste from their webpage regarding the products....look at the 3d bullets under Conditions regarding when interest is paid.

There are many "fixed-type" accounts at various Thai banks and many come with different conditions/rules...always ensure you understand the fine print.

Capture.JPG

If I deposited 1,000,000 bt for 11 months at the rate of 2.8% , the interest is 25,666 bt , am I correct on that ? That is before tax , what percentage rate is tax on interest !!! Thanks in advance.

[Ling Kae]

I've had about a half dozen Bangkok Bank fixed accounts and they all paid the interest on maturity; not monthly, not on day one, etc. Several posts above where the Bangkok Bank 4, 7, and 11 month fixed accounts are talked about, I just looked at the Bangkok Bank webpage on these products and it says they pay interest on maturity. See below for a cut and paste from their webpage regarding the products....look at the 3d bullets under Conditions regarding when interest is paid.

There are many "fixed-type" accounts at various Thai banks and many come with different conditions/rules...always ensure you understand the fine print.

Capture.JPG

If I deposited 1,000,000 bt for 11 months at the rate of 2.8% , the interest is 25,666 bt , am I correct on that ? That is before tax , what percentage rate is tax on interest !!! Thanks in advance.

Yes, that is what I worked it out to as well.

Edit: The lady in Bangkok Bank told me the tax will be 15% on the total interest.

Someone on the forum said you can lodge a form and claim that back. (But I am not sure about this)

Edited August 24, 2014 by Ling Kae

[JAS21]

Interest will be 11/12 * 28000. Witholding tax will be 15%. You can claim witholding tax back from the tax people.

[Billy The Kid]

Interest will be 11/12 * 28000. Witholding tax will be 15%. You can claim witholding tax back from the tax people.

Thanks , never heard of tax back . Even though I paid tax on interest over ten years . No chance to claim all that back. I wish . 5555 . How do I go about to claim the tax back ? Thanks again.

[scatalyst]

Interest will be 11/12 * 28000. Witholding tax will be 15%. You can claim witholding tax back from the tax people.

Thanks , never heard of tax back . Even though I paid tax on interest over ten years . No chance to claim all that back. I wish . 5555 . How do I go about to claim the tax back ? Thanks again.

Yep, this year I got all the tax that had been withheld on my fixed accounts last year. There are lots of threads about it. I think I read this one and got all the info I needed:

www.thaivisa.com/.../610294-obtaining-refund-of-tax-withheld-on-thai-bank -fixed-savings-account/

Also, many of the folks posting about it had gone in January with no lines or waiting. I, on the other hand, went in early March and had to wait about an hour at the revenue office. Next year I'll be going in January too.It was easy, kinda fun to have done something new, and great to get the money back. Good luck!

p.s. Of course, if you're working, your income might be too high so that you wouldn't qualify for the refund.

[chiang mai]

The Thai tax tables are here:

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

The first 150k of income is free, the second 150k of income is taxed at 5%, the third 150k at 10% and so on. Basically, the first 500k of interest will cost you about 6% in tax.

[chiang mai]

I also wonder how many people understand the difference between simple and compound interest.

Didn't want to clutter this topic, so I just started a new thread asking for an explanation and example to better understand the differences. Would appreciate your input there.

Done.

[Pib]

I've had about a half dozen Bangkok Bank fixed accounts and they all paid the interest on maturity; not monthly, not on day one, etc. Several posts above where the Bangkok Bank 4, 7, and 11 month fixed accounts are talked about, I just looked at the Bangkok Bank webpage on these products and it says they pay interest on maturity. See below for a cut and paste from their webpage regarding the products....look at the 3d bullets under Conditions regarding when interest is paid.

There are many "fixed-type" accounts at various Thai banks and many come with different conditions/rules...always ensure you understand the fine print.

Capture.JPG

If I deposited 1,000,000 bt for 11 months at the rate of 2.8% , the interest is 25,666 bt , am I correct on that ? That is before tax , what percentage rate is tax on interest !!! Thanks in advance.

Yes, that's correct...Bt25,666 since it's simple interest with no compounding. If it had been compound monthly it would have been Bt25,968, or Bt302 more than the simple interest simple interest-no compounding method. Not a big difference for a Bt1M principal amount over a short period like 11 months. But as mentioned in other posts, compounding can make some very significant/big differences for larger sums and longer periods. For me I seem to be bouncing between fixed accounts in the 4 to 15 month range depending on the best promotion at the time when one of my fixed accounts matures. I'm currently in a Bangkok Bank 15 month, 3.25% fixed account which matures this December.

Below are a couple of snapshots of above calculations using this calculator focused towards "fixed accounts" that come in various lengths, interest compounding methods, etc.

2.8%, 11 month Fixed Account, Simple Interest-No Compound

2.8%, 11 month Fixed Account, Compound Monthly

15% of gross interest will be withheld/sent to the govt for a traditional fixed account. However, getting a refund is easy and usually take 2 to 6 weeks depending on your local tax office. You can go to this ThaiVisa thread for info on obtaining a refund. There are other threads also. Cheers.

[Billy The Kid]

I've had about a half dozen Bangkok Bank fixed accounts and they all paid the interest on maturity; not monthly, not on day one, etc. Several posts above where the Bangkok Bank 4, 7, and 11 month fixed accounts are talked about, I just looked at the Bangkok Bank webpage on these products and it says they pay interest on maturity. See below for a cut and paste from their webpage regarding the products....look at the 3d bullets under Conditions regarding when interest is paid.

There are many "fixed-type" accounts at various Thai banks and many come with different conditions/rules...always ensure you understand the fine print.

Capture.JPG

If I deposited 1,000,000 bt for 11 months at the rate of 2.8% , the interest is 25,666 bt , am I correct on that ? That is before tax , what percentage rate is tax on interest !!! Thanks in advance.

Yes, that's correct...Bt25,666 since it's simple interest with no compounding. If it had been compound monthly it would have been Bt25,968, or Bt302 more than the simple interest simple interest-no compounding method. Not a big difference for a Bt1M principal amount over a short period like 11 months. But as mentioned in other posts, compounding can make some very significant/big differences for larger sums and longer periods. For me I seem to be bouncing between fixed accounts in the 4 to 15 month range depending on the best promotion at the time when one of my fixed accounts matures. I'm currently in a Bangkok Bank 15 month, 3.25% fixed account which matures this December.

Below are a couple of snapshots of above calculations using this calculator focused towards "fixed accounts" that come in various lengths, interest compounding methods, etc.

2.8%, 11 month Fixed Account, Simple Interest-No Compound

Capture.JPG

2.8%, 11 month Fixed Account, Compound Monthly

Capture1.JPG

15% of gross interest will be withheld/sent to the govt for a traditional fixed account. However, getting a refund is easy and usually take 2 to 6 weeks depending on your local tax office. You can go to this ThaiVisa thread for info on obtaining a refund. There are other threads also. Cheers.

Appreciated your input and links , very interesting and helpful. Thanks again.

[laszer]

Sorry, not following this. How does locking the money in for 11 months make it ineligible for immigration purposes...does the 800k have to be liquid in a savings account?

I just now see that Bangkok Bank has added a 7-month Fixed Deposit account paying 2.5%. So now they are advertising three Fixed Deposit options:

4-month Fixed Deposit, Interest Rate 2.00%, Minimum Deposit 200,000 Baht

7-month Fixed Deposit, Interest Rate 2.50%, Minimum Deposit 200,00 Baht

11-month Fixed Deposit, Interest Rate 2.80%, Minimum Deposit 100,000 Baht (but the funds used to open the 11-month account cannot be withdrawn or transferred from an existing Bangkok Bank account)

So the 11 month deal needs new money, that's becoming fairly common these days.

Also, something to watch out for is a nasty little trick that's written into the fine print whereby they pay you all the interest on the day the account is opened, that seems like a good idea because you can then reinvest that interest and get double dip. BUT, you can't withdraw the principle for the duration of the fix, it makes the account useless for Immigration visa purposes.

[laszer]

Not following this.,....how does locking up money in a fixed deposit invalidate it for retirement visa financial requirments if it is held for more than 60 days?...does it need to be in a savings account?

I just now see that Bangkok Bank has added a 7-month Fixed Deposit account paying 2.5%. So now they are advertising three Fixed Deposit options:

4-month Fixed Deposit, Interest Rate 2.00%, Minimum Deposit 200,000 Baht

7-month Fixed Deposit, Interest Rate 2.50%, Minimum Deposit 200,00 Baht

11-month Fixed Deposit, Interest Rate 2.80%, Minimum Deposit 100,000 Baht (but the funds used to open the 11-month account cannot be withdrawn or transferred from an existing Bangkok Bank account)

So the 11 month deal needs new money, that's becoming fairly common these days.

Also, something to watch out for is a nasty little trick that's written into the fine print whereby they pay you all the interest on the day the account is opened, that seems like a good idea because you can then reinvest that interest and get double dip. BUT, you can't withdraw the principle for the duration of the fix, it makes the account useless for Immigration visa purposes.

[AyG]

Sorry, not following this. How does locking the money in for 11 months make it ineligible for immigration purposes...does the 800k have to be liquid in a savings account?

Also, something to watch out for is a nasty little trick that's written into the fine print whereby they pay you all the interest on the day the account is opened, that seems like a good idea because you can then reinvest that interest and get double dip. BUT, you can't withdraw the principle for the duration of the fix, it makes the account useless for Immigration visa purposes.

The money for immigration purposes has to be immediately available. (Sometimes Immigration will actually instruct you to make a withdrawal and update the passbook.) Any account that prohibits withdrawals before term is therefore not suitable. However, I've never heard of fixed deposit bank account working in the way chiang mai describes. The Bangkok Bank fixed deposit accounts mentioned certainly aren't like this.