Commercial Banks Announce An Increase In Savings Interest

[Jai Dee]

Commercial banks announce an increase in savings interest

Following announcements by the Kasikorn and Siam Commercial Bank that there will be an increase in interest rates, many other commercial banks have made similar announcements.

The Bank of Ayutthaya has increased its 12 months savings interest form 0.25% to 3.25%, and loan interest from 0.25% to 7.25% for MLR and 7.75% for MOR and MRR. Meanwhile, Siam City Bank has increased its 12 months savings interest to 3.25% and its loan interest to 7.25% for MLR and 7.70% for MOR and MRR.

The Thai Military Bank, the 5th largest banking institution in the nation has increased interest rates of 12 month savings to 4%, 24 month savings to 4%, and 36 month savings to 4.25%. The Thai Military Bank's loan interests are at 7.25% for MLR and 7.75% for MOR and MRR.

The Bangkok Bank similarly announced that its 12 month savings interest would now be 3.25-4%, 24 month savings will be 4%, and 36 month savings will be 4.25%. Loan interest for MLR will be 7%, MOR 7.25%, and MRR 7.5%.

This increase in savings interest by commercial banks was made to complement market conditions and the banking interest policy of the government.

Source: Thai National News Bureau Public Relations Department - 07 March 2006

[wombat]

great..terrific...but,

does it apply to falang accounts?

[capt_canada42]

great..terrific...but,

does it apply to falang accounts?

Heh silly boy forget that just give your money to moi(me)

[wombat]

great..terrific...but,

does it apply to falang accounts?

Heh silly boy forget that just give your money to moi(me)

no worrys..

cheques in the mail,

what are the other two....?

[jaapfries]

Commercial banks announce an increase in savings interest

Following announcements by the Kasikorn and Siam Commercial Bank that there will be an increase in interest rates, many other commercial banks have made similar announcements.

=============================================================

Of course; this is not simply "good news"; this is "putting things right" finally. Up until now, the effective interest paid on savings accounts, in this country, was grossly below what would be termed as "normal" in other developed nations around the world.

I am just wondering if this may have something to do with the imminent demise of one Khun Taksin . . . . . . . ? ? ? Now THAT would not suprise me in the least !

[foolwholaughsatdeath]

since when is Thailand a "developed" country... its still bahn nok as far as I'm concerned

[LivinLOS]

Now this talks about 'savings rates' but its basic interest rates accross the board.. Major jumps in effect !!!

The suspicious cynic in me says that the timing of this with Wakky Tacky on the ropes and the slim chances of unrest might be a covering move to firm up the baht exchange rates..

Also one of the big drives of the TRT has been to get poor communities effective and affordable loans has it not ?? Get them out of the loan sharks and 5 for 4 'chinese' systems. What happens to thier loans when loan interest goes from 0.25% to 7.25% ?!?!? Thats a 2800% rise isnt it !!! imagine if your morgate payments just rose by 2100% overnight or your car payments ?? Seems to me this is bigger news than it sounds..

Even an armchair economist knows your base rates control the speed of money flow and currency values.. its a delicate balancing act between many factors that keep the economy stimulated, your currency within ranges, industry can afford to finance etc.. Jumps like this says to me that they are yanking on the controls ??

[manutoo]

After a search on the forum, I cannot find the announcement about the changed rate of Kasikorn.

Anyone knows how did it change ?

loan interest from 0.25% to 7.25%

the loan interest was incredibly low !!

And now, it's a bit too high...

[The Philosopher]

This is fine if something is done to ease the pain of inward and outward investment from overseas - otherwise it is unsustainable for the banks. It also runs the risk of putting Thais or residents with loans under pressure- it also falsely inflates the value of the baht - a real risky move to make such sweeping changes.

[falstaff]

All well and good for the savers, however the screaming is going to start when the spenders READ BORROWERS start to their interest rates rise.

Perchance an increase in the N.P.L. portfolio of the banks and the credit card companies, not to say all the plethora of other types of card Somchai in the street has on his 8000.B a month.

Methinks the pooh will smite the fan shortly and we will rerun 1997 again.

[simcity]

i do not think a rise like that is good ! Inflation rampant, what going to happen next!

[mrtony]

All these rates are for 12 months or more of commited cash, which may have serious penalties for early withdrawl. Nor do I think the average Thai is making cash deposits of 12 months, or working on some kind of retirement account. What about short term rates or savings account rates?

[hardy1943]

i do not think a rise like that is good ! Inflation rampant, what going to happen next!

A slow down in the Economy and higher unemployment

[slim]

The Bank of Ayutthaya has increased its 12 months savings interest form 0.25% to 3.25%, and loan interest from 0.25% to 7.25% for MLR and 7.75% for MOR and MRR. Meanwhile, Siam City Bank has increased its 12 months savings interest to 3.25% and its loan interest to 7.25% for MLR and 7.70% for MOR and MRR.

Pardon?

I think that should be by 0.25% to 3.25% and 7.25%

0.25% to 7.25% - I dont think so !

[samran]

i do not think a rise like that is good ! Inflation rampant, what going to happen next!

That is neanderthal economics.

Rise in interest rates encourages people to save. More saving equals less unnecessary spending (eg speculation), which is fuels inflation. Cut out the spending, cut out the inflation. Lessen inflationary expectations, business knows what it will be paying tomorrow, and plan accordingly. A more stable economy all around.

If things continued on as they were, it was in everyones interest to borrow. Real Interest rates (inflation - minus nominal interest rates) was already very low, close to zero. People could borrow money essentially for free, and go off and invest it in silly things like condo's with stuipid names like 'Trendy Condo's' on Sukhumvit.

Now people have a safe, risk free alternative to getting a return on their money. I just can't wait for ING-Direct to enter the market, so we get real savings competition.

[Losangels]

All these rates are for 12 months or more of commited cash, which may have serious penalties for early withdrawl. Nor do I think the average Thai is making cash deposits of 12 months, or working on some kind of retirement account. What about short term rates or savings account rates?

Average and most Thais and I suspect foreigners have most of the money it their savings accounts which pay between 0.75% to 1.00%. This rate is much lower than the inflation rate thus the interest earned is nil not to mentioned that it is also taxed.

[nikster]

The Bank of Ayutthaya has increased its 12 months savings interest form 0.25% to 3.25%, and loan interest from 0.25% to 7.25% for MLR and 7.75% for MOR and MRR. Meanwhile, Siam City Bank has increased its 12 months savings interest to 3.25% and its loan interest to 7.25% for MLR and 7.70% for MOR and MRR.

Pardon?

I think that should be by 0.25% to 3.25% and 7.25%

0.25% to 7.25% - I dont think so !

Correct.

It's +0.25% to both savings and loans

A rate change from 0.25 - 7.25 is basically impossible, that's just not how it works

[samran]

It also runs the risk of putting Thais or residents with loans under pressure- it also falsely inflates the value of the baht - a real risky move to make such sweeping changes.

Nothing wrong with putting loans under pressure if indeed those loans were made and were never going to make a return anyway. You need a capital market where the cost of money equals the risk to stop people making silly investment decisions. I think this rate rise by the banks is a tacit admission that the economy is overheating.

As for increasing the value of the baht, other than stopping people sending money off shore where they could get a better return for their savings, it will do nothing. The money markets look at the headline rate published by the central bank to determine their weighting in baht, and will invest accourdingly in the corresponding treasuries. It is unlikely that the interest for a savings account will come into a fund managers calculations.

[ilyushin]

Good news for large savings account holders and a good reason for people to start saving more. The housing loans and outstanding loans will be tough with higher interest rates which could cause higher NPLs. Remember we used to get 13-15%+ on 3-9 mth fixed accounts in the early 90's which was very nice.

[bubba]

I don't see much good news at Kasikorn for current (checking) accounts, which pay 0% interest, or for savings accounts, which still pay 0.75%

Rates are here:

http://www.kasikornbank.com/GlobalHome/EN/...rate_saving.jsp

[Anon999]

since when is Thailand a "developed" country... its still bahn nok as far as I'm concerned

Maybe you should go find yourself a 'developed country'.

i do not think a rise like that is good ! Inflation rampant, what going to happen next!

When inflation is rising banks always increase interest rates to curb it. Furthermore who wants to deposit money into savings accounts with interest rates at 0-0.75%?

[egeefay]

The Bank of Ayutthaya has increased its 12 months savings interest form 0.25% to 3.25%, and loan interest from 0.25% to 7.25% for MLR and 7.75% for MOR and MRR. Meanwhile, Siam City Bank has increased its 12 months savings interest to 3.25% and its loan interest to 7.25% for MLR and 7.70% for MOR and MRR.

Pardon?

I think that should be by 0.25% to 3.25% and 7.25%

0.25% to 7.25% - I dont think so !

Yes. Unfortunately the article quoted was taken from "Thainews.com". "form 0.25% to 3.26%"

All other news sources are quoting only a .25% rise in interest rates...significant but nowhere near

the huge jump from .25 to 3.26...or 7.25!!!

[george]

Thai banks raise interest rates

BANGKOK: -- Some of Thailand’s leading banks have taken the step to hike their interest rates ahead of the Monetary Policy Committee meeting scheduled for later this week.

Following the lead of Kasikornbank Plc, the country’s fourth largest commercial bank, Thai Military Bank Plc and Bank of Ayudhya have all announced that they would follow suit by increasing their lending rates.

Bank of Ayudhya, one of the leading commercial banks, said that it had increased its 12-month fixed deposit rate and also increased its lending rates by 0.25% effective from tomorrow.

“The increase this time is on both sides, deposits and lending, by 0.25% and follows the lead of Kasikornbank,” Mr. Tak Bunnag, executive vice president of BAY said.

BAY said that its interest rate for 12-month deposit would be 3.25 to 4.25%, while its 24-month deposit rate would stand at 4% and 36-month rates at 4.25%.

In regards to the lending rate, BAY said that its Minimum Lending Rate (MLR) would rise to 7.25%, while Minimum Overdraft Rate (MOR) and its Minimum Retail Rate (MRR) would rise to 7.75%.

Thai Military Bank, also followed suit, announcing that it too would hike its lending rates by 0.25 to 0.50% with immediate effect.

Subhak Siwaraksa, president and chief executive officer of TMB said that the hike in deposit rates would only be made after the March 8 meeting of the Monetary Policy Committee.

-- Bangkok Post 2006-03-07

[Anon999]

This is fine if something is done to ease the pain of inward and outward investment from overseas - otherwise it is unsustainable for the banks. It also runs the risk of putting Thais or residents with loans under pressure- it also falsely inflates the value of the baht - a real risky move to make such sweeping changes.

The baht is currently significantly stronger than it was only a short time ago. The exchange rate against the £ sterling has been around +/- 68 for a few weeks and against the $US +/- 39.

Edited March 7, 2006 by Anon999

[cmsally]

Does this explain why in the last few weeks , every time I step into one of the leading banks, someone is trying to sell me some kind of new savings product with higher interest. Is there some reason for trying to get people to move money from a normal acct. to a "super super bonus acct" or something attached to mutual funds?

Heavy sales from 1 particular bank; I'm sure I'm not the only person experiencing this.

[marshbags]

since when is Thailand a "developed" country... its still bahn nok as far as I'm concerned

Maybe you should go find yourself a 'developed country'.

i do not think a rise like that is good ! Inflation rampant, what going to happen next!

When inflation is rising banks always increase interest rates to curb it. Furthermore who wants to deposit money into savings accounts with interest rates at 0-0.75%?

All foreigners who are required to put money into their bank accounts may seem minor but it is an

example of no choice situations.

I mentioned on another thread recently that depositing large amounts of baht into your acount

in Thailand is a risky business.

I used my own personal experience of 1997 when the last crash happened.

When i wanted to transfer it back to sterling pounds in my U.K. bank account due to the uncertaincy, it had really devalued.

I.E. coming into Thailand 1 pound sterling to baht = 37. 4 ..... sending out 82 baht to buy 1 pound.

This taught me never to deposit more than the required ammount to cover expenses and visa requirements which i still stick to today.

Anyone with any sense will do the same in my humble opinion.

Before anyone says " oh well the interest rates in U.K. are rubbish also, no problem. " please note.

My accounts with the Nationwide are in excess of 4%, the money is safe and i can find even better rates should i be inclined to do so ( which i,m not ).

Should any financial wizz kids start giving me reasons why what i say is not relevant to investment ect. and percentages...........................please

I deal in reality and spending power when it comes to my money and basic spending at the till ect.

and this is a good indicator for me as a layman on my monies strength.

This also determines my choice to rent and never buy, i have arrangements to take care of my wife on my day of judgement and she is happy with the reasons why.................................

marshbags

Edited March 7, 2006 by marshbags

[Hendrikus]

In all kindness:

Raising interest is also raising the inflation related to interest. As all trade is sum-zero, this raising of interest rates will not avoid sum-zero principle. Of course, by applying conditions to the 'inflation principle', and deduct mentioning these conditions, creating a multitude of alternative illusions is, no doubt, possible. One can choose to go along with these generated illusions.

For those interested, the following site are usefull as tool.

Mod: Links Deleted.

Money/banking is in practice, dividing and multiplying 'zero' by using 'linguistical camouflage' such as the words: dollar, pound, euro, etc.

Also to bare in mind, is that "Fractional Reserve Banking' is also applied, so producing these 'fiat debt-notes' ($,€, etc) is in principle 'endless'.

Kindly it is pointed out that there is 'no' Nobel Prize' for economics. There is a

'The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel' however.

Regards.

Edited March 7, 2006 by samran

[Jeddah Jo]

On a more practical note, it is worth realising that long term interest rates in the US have started to rise significantly and could shortly be hitting multi-year highs.

This will start to put pressure on bonds issued by developing nations like Thailand as these have to yield more than the US$ to allow the for additional risks involved in holding Thai bonds.

Domestic banks are no doubt increasing saving rates to try and attract capital more cheaply than it is currently possible to raise in international financial markets.

All this can be thought of as a precursor of much higher interest rates long term and yes possibly inflation. Long, long term deposits therefore are probably not such a good idea at present. In fact for Thailand I am not sure what IS a good idea! Any suggestions?

[Hendrikus]

On a more practical note, it is worth realising that long term interest rates in the US have started to rise significantly and could shortly be hitting multi-year highs.

This will start to put pressure on bonds issued by developing nations like Thailand as these have to yield more than the US$ to allow the for additional risks involved in holding Thai bonds.

Domestic banks are no doubt increasing saving rates to try and attract capital more cheaply than it is currently possible to raise in international financial markets.

All this can be thought of as a precursor of much higher interest rates long term and yes possibly inflation. Long, long term deposits therefore are probably not such a good idea at present. In fact for Thailand I am not sure what IS a good idea! Any suggestions?

I kindly suggest 'Trend Following'. One site on 'Trend Following' is http://www.turtletrader.com/

Applying this to the Amsterdam Stockmarket has specific qualities. For one the 'Dutch Language' is rather 'black/white' and as this language forms the 'conditioning' of the Dutch people, their worldview is related to the illusions generated by this condtioning, and by nature the Dutch are rarely aware of this phenomenom.

Regards,

[astral]

The baht is currently significantly stronger than it was only a short time ago. The exchange rate against the £ sterling has been around +/- 68 for a few weeks and against the $US +/- 39.

Is that really a strong Baht, or a weak(er) dollar?

I know they have a basket of currencies, but in my book they

still have all their dollars in one basket.