Mutual Or Fixed Deposits

[LawrenceChee]

I have been thinking of parking some money to minimize the hassle of bank wires

As I come here every 4 mths ...there seems to be a minimal risk in leaving the money in a fixed deposit or mutual fund at one of the local banks

Friends tell me the interest earning on fixed deposits are taxable while those in mutual funds are not. Granted that mutual funds have a risk factor , they tell me that there ate funds with guaranteed returns of at least 3 % or your principal ...I see a lot of bank ads outside Bangkok bank offering 3.45% blah blah blah

Anyone with experience and doing the same ? Appreciate the advice

[L&J]

We've kept money in a fixed account for years based on the fact that we are living here and spending baht so might as well eliminate all the

problems with moving funds and constant changing exchange rates. We have generally gotten between 3.25-3.90% return but they do take out

Thai taxes which drops itabout .5% . Over the last five years in most of the West you'd be lucky to clear 1.5% on your deposit/CD accounts so

we are doing better here anyway. We also are ahead almost 15% on the exchange rate from when we brought it in over now, but that is

just good karma. Haven't looked into Mutual Funds but if you want a degree of risk I feel you should take that back home rather than here.

[meatboy]

i myself and wf.have 6 fixed accs.all paying 3.25% upwards over 6months up to 22months it is safe but you will pay 15%tax,as we are perminant residents we are able to claim it back.try to put it in diff terms so when you come back they will mature.

[iainiain101]

I asked about purchasing Mutual Funds at SCB this week at Airport Plaza. They informed me that the rules had changed last month, and now only foreigners with work permits could buy them.

Can anyone confirm these new rules?

[mania]

I asked about purchasing Mutual Funds at SCB this week at Airport Plaza. They informed me that the rules had changed last month, and now only foreigners with work permits could buy them.

Can anyone confirm these new rules?

Sounds like the standard tag-line of many banks dealing with foreigners about anything.

I would try a few more banks or branches.

To the OP, Bank Of Ayudyha has an account called "Mee Tae Dai" ( loosely translated: you get & never lose )

Not as great interest wise as some at 2.9% but nice feature of allowing 2 withdrawals per month with no penalty or breaking of the rate.

If you need more withdrawals it is only 50 THB per WD. Also interest is paid monthly

Decent all things considered.

http://www.krungsri.com/en/promotion-detail.aspx?cids=1&cid=&did=572

edit: link added

Edited August 23, 2012 by mania

[jjczap]

We've kept money in a fixed account for years based on the fact that we are living here and spending baht so might as well eliminate all the

problems with moving funds and constant changing exchange rates. We have generally gotten between 3.25-3.90% return but they do take out

Thai taxes which drops itabout .5% . Over the last five years in most of the West you'd be lucky to clear 1.5% on your deposit/CD accounts so

we are doing better here anyway. We also are ahead almost 15% on the exchange rate from when we brought it in over now, but that is

just good karma. Haven't looked into Mutual Funds but if you want a degree of risk I feel you should take that back home rather than here.

\

I too live here and have most of my assets in fixed deposits - all of which are in Bangkok Bank - I am currently in the process of moving my deposits to several banks because of a change in the Thai banking rules by the BOT -- as of Aug 11 2012 your deposits are only insured up to 1 mil baht per bank - just a friendly warning to those who are lucky enough to have more than 1 mil

[mania]

I too live here and have most of my assets in fixed deposits - all of which are in Bangkok Bank - I am currently in the process of moving my deposits to several banks because of a change in the Thai banking rules by the BOT -- as of Aug 11 2012 your deposits are only insured up to 1 mil baht per bank - just a friendly warning to those who are lucky enough to have more than 1 mil

I also saw this thread awhile back

Deposit Protection Will Not Be Reduced As Planned

[jjczap]

I too live here and have most of my assets in fixed deposits - all of which are in Bangkok Bank - I am currently in the process of moving my deposits to several banks because of a change in the Thai banking rules by the BOT -- as of Aug 11 2012 your deposits are only insured up to 1 mil baht per bank - just a friendly warning to those who are lucky enough to have more than 1 mil

I also saw this thread awhile back

Deposit Protection Will Not Be Reduced As Planned

I too saw this article and have been waiting for the Cabinet to approve the extension - I have searched but have not found anything to date that it has been extended - the chart I attached was from this agency this morning

[mania]

I too saw this article and have been waiting for the Cabinet to approve the extension - I have searched but have not found anything to date that it has been extended - the chart I attached was from this agency this morning

I did see this,

Update July 2012 :

During a cabinet meeting dd. 26 June 2012, it was decided that the deposit guarantee should be kept at 50,000,000 baht per person per bank, as requested by the Finance Ministry. This decision was apparently guided by global economic uncertainty.

It is most interesting that this statement did not make headlines, and was only reported in a sidebar in the newspapers (source here, the Nation dd. 27 June)

http://www.thaiwebsites.com/deposits-insurance.asp

But, must also wonder in the event of any real financial collapse

gaing your money back through any countries promise may be easier said than done.

[chiang mai]

We've kept money in a fixed account for years based on the fact that we are living here and spending baht so might as well eliminate all the

problems with moving funds and constant changing exchange rates. We have generally gotten between 3.25-3.90% return but they do take out

Thai taxes which drops itabout .5% . Over the last five years in most of the West you'd be lucky to clear 1.5% on your deposit/CD accounts so

we are doing better here anyway. We also are ahead almost 15% on the exchange rate from when we brought it in over now, but that is

just good karma. Haven't looked into Mutual Funds but if you want a degree of risk I feel you should take that back home rather than here.

\

I too live here and have most of my assets in fixed deposits - all of which are in Bangkok Bank - I am currently in the process of moving my deposits to several banks because of a change in the Thai banking rules by the BOT -- as of Aug 11 2012 your deposits are only insured up to 1 mil baht per bank - just a friendly warning to those who are lucky enough to have more than 1 mil

I believe you will find that the change of law to only 1 million has been cancelled, it remains an unlimited amount.

[chiang mai]

OP: you should read the attached pinned thread for details of rates:

[jjczap]

I too saw this article and have been waiting for the Cabinet to approve the extension - I have searched but have not found anything to date that it has been extended - the chart I attached was from this agency this morning

I did see this,

Update July 2012 :

During a cabinet meeting dd. 26 June 2012, it was decided that the deposit guarantee should be kept at 50,000,000 baht per person per bank, as requested by the Finance Ministry. This decision was apparently guided by global economic uncertainty.

It is most interesting that this statement did not make headlines, and was only reported in a sidebar in the newspapers (source here, the Nation dd. 27 June)

http://www.thaiwebsi...s-insurance.asp

But, must also wonder in the event of any real financial collapse

gaing your money back through any countries promise may be easier said than done.

THANKS a million!!! I now know why I couldn't find anything - this really helps with my planning - I will double check/triple check with Bangkok Bank about this - my view on them is that if there is a problem they will be the last one standing - I will also investigate the Government savings bank since it appears they are exempt from these rules

I agree with the other comments on a collapse - there is no money to cover this - just like in the US with the FDIC ( Federal Deposit Ins Corporation ) they can handle quite a number of bank failures but no way a collapse - we would all be at the mercy of the governments to cover the difference - during the Asian financial crisis the Thai Gov was on the hook to cover all the deposits ( still trying to get out of the Trillion Baht ++ hole there in )- now trying to lower the ins - What do they know that we don't?

[jjczap]

I too saw this article and have been waiting for the Cabinet to approve the extension - I have searched but have not found anything to date that it has been extended - the chart I attached was from this agency this morning

I did see this,

Update July 2012 :

During a cabinet meeting dd. 26 June 2012, it was decided that the deposit guarantee should be kept at 50,000,000 baht per person per bank, as requested by the Finance Ministry. This decision was apparently guided by global economic uncertainty.

It is most interesting that this statement did not make headlines, and was only reported in a sidebar in the newspapers (source here, the Nation dd. 27 June)

http://www.thaiwebsi...s-insurance.asp

But, must also wonder in the event of any real financial collapse

gaing your money back through any countries promise may be easier said than done.

THANKS a million!!! I now know why I couldn't find anything - this really helps with my planning - I will double check/triple check with Bangkok Bank about this - my view on them is that if there is a problem they will be the last one standing - I will also investigate the Government savings bank since it appears they are exempt from these rules

I agree with the other comments on a collapse - there is no money to cover this - just like in the US with the FDIC ( Federal Deposit Ins Corporation ) they can handle quite a number of bank failures but no way a collapse - we would all be at the mercy of the governments to cover the difference - during the Asian financial crisis the Thai Gov was on the hook to cover all the deposits ( still trying to get out of the Trillion Baht ++ hole there in )- now trying to lower the ins - What do they know that we don't?

I just talked to a very high level at Bangkok Bank who had to double check - for some reason the Gov did not widely broadcast this but the answer is that the Cabinet did approve an extension of the 50 mil baht ins but only for 3 years - until Aug 2015

[LawrenceChee]

Just went to Bangkok Bank at Tesco ...and asked.

Fixed Deposit - 3.25% for 5 months but u pay the tax as mention in the earlier posts

Mutual Funds - Guaranteed minimum returns of 3.15% return for 6 months , no tax applicable.

I put my money with the mutual funds , just need the usual smile and passport and a moo baan address no other requirements.

Kasikorn & SCB all offered me the same terms at the Tesco building, went with BB as I have an existing account and when it matures they will transfer the balance and interest earnings directly into your saving account.

Cheers

Lawrence

[mania]

Mutual Funds - Guaranteed minimum returns of 3.15% return for 6 months , no tax applicable.

Thanks Lawrence for that info.

Don't Mutual Funds always have some sort of management fee deducted though?

Either a management fee or redemption fee or both.

Also that 3.25% is for 6 months or P.A.? If for 6 months they are guaranteeing a 6.30% return per year.

Surprised by that as I have always expected any Mutual Fund is subject to markets movement.

I have never seen one guarantee a return. Except maybe one that deals in government bonds of fixed rates.

Thank You for any additional info.

Edited August 23, 2012 by mania

[LawrenceChee]

G'day

The return is for 6 months. The staff tells me there is no fee payable although I wont be surprised at the usual 1% fee for mutual funds

I like the auto transfer function as I am not here in CM all the time

Cheerios

Lawrence

[mania]

G'day

The return is for 6 months. The staff tells me there is no fee payable although I wont be surprised at the usual 1% fee for mutual funds

I like the auto transfer function as I am not here in CM all the time

Cheerios

Lawrence

Thanks Lawrence

Looking at the BKB site I see they have many Mutual Funds available.

But they do have an Auto Redemption Fund

I am guessing you have that one as it fits your description.

http://www.bangkokbank.com/BangkokBank/PersonalBanking/BuildYourWealth/MutualFunds/AutoRedemption/Pages/Default.aspx

Thank you for the info as it is interesting reading about all the funds they have available there.

[LawrenceChee]

The SCB bank had a government bond with a guarantee at 2.90% return per annum

The mutual funds are subject to the market movements ...Kasikorn and Bangkok Bank guarantees a minimum 3.15% so if the market swings south that is the worse return or it could be better then 3.15%

[iainiain101]

Just went to Bangkok Bank at Tesco ...and asked.

Fixed Deposit - 3.25% for 5 months but u pay the tax as mention in the earlier posts

Mutual Funds - Guaranteed minimum returns of 3.15% return for 6 months , no tax applicable.

I put my money with the mutual funds , just need the usual smile and passport and a moo baan address no other requirements.

Kasikorn & SCB all offered me the same terms at the Tesco building, went with BB as I have an existing account and when it matures they will transfer the balance and interest earnings directly into your saving account.

Cheers

Lawrence

The Mrs got sold one of these, and I think the word 'guaranteed' must translate differently. I researched the underlying investments and found that the majority were in Soereign debt around the world, so as long as no one defaults, 'guaranteed'!

I dont know if we have any of the pensioners on the forum who had all their savings in Barings 'guaranteed' debt in 1995......

[jjczap]

G'day

The return is for 6 months. The staff tells me there is no fee payable although I wont be surprised at the usual 1% fee for mutual funds

I like the auto transfer function as I am not here in CM all the time

Cheerios

Lawrence

Hi Lawrence - my wife works for Bangkok Bank and she says that she has never used the term guaranteed - she says these are mutual funds and have market risk at redemption - its worth what the market says its worth - the term that is used is expected return but no guarantee - she says though that as long as she can remember it has always at least achieved the expected return -- is this the fund

From Bangkok Bank web site

Bualuang Fixed Income - Term Fund 33/12

Investment opportunity to enhance your return

Invest about 6 months...Expected return 3.15% per annum

Open for subscription 22-28 August, 2012

Management Fee:

0.75% per annum of the registered fund size

Notice that its 3.15% per annum

[LawrenceChee]

Thanks mate for the answers from your wife

I guess because the funds invest in Thai government bonds they assume it is a given they won't default and maybe that is why the seller told me its guaranteed

I know with mutual funds there is no guarantee since it is an investment tool ...the Thais have been using this for years to avoid paying tax on interest earned and I reckon it's worth the small risk unless the government defaults rather unlikely at this time in Asia in terms of risks ...

For me it's just a great place to park the cash till I return ...a couple of thousands in interests pays for a few teas at Chedi and Holiday Inn Buffet stops.