Thai Islam Bank Offering 3.4% Interest Per Month?

[thrilled]

In the us I'm hardly getting 3.4% with stock dividends.I'd say that's A good deal if it's A secure bank.

[mikecwm]

Back to the OP's question, what makes you think that you would receive 3.4% per month? The conditions says:

< Thai language removed, this is the English Language side of the forum, English is the only acceptable language. If you want to post in Thai, you can do so in the Thai Language forum. >

3.40%

I don't read Thai but a little help from Google translate (which I admit should not be relied upon, so I had my girlfriend confirm it) indicates that the highlighted bit in parenthesis means per year/p.a. So yes, you are paid monthly but at a rate equivalent to 3.4% per annum - not 3.4% per month.

Also note that the bank uses the expression "expected return", so it sounds like it might not be a guaranteed rate?

Sophon

Thank you Sophon. I thought it fairly obvious that the rate quoted must be the annual rate. Even Bernie Madoff didn't promise his greedy followers he would pay them nearly 40% a year!

[meatboy]

In the us I'm hardly getting 3.4% with stock dividends.I'd say that's A good deal if it's A secure bank.

kasikorn 3.20% 14months,now thats a good deal.

[a99az]

Sounds like a re-run of BCCI. If it sounds too good then it usually is too good.

[TheGhostWithin]

Non Performing Loans at around 30% Normal if a bank have NPL's around 4%, it is considered high !

It seems like our sharia brothers are taking "sharing loss and profit" a little too litterally! When the news broke a couple of months ago, about the NPL's, people were queueing to take their money out! So prophets or not, stay away, not hal-al !

Yep, that bank also called the IBank is belly up and has been having runs on it by panicked customers. It has asked the government for a bailout.

Another Thai bank, SME, has asked the government for a bailout.

I wouldn't have a single baht in a Thai bank right now. Nor would I have in real estate or the stock market.

Link

What a load of crap! I guess, that even you have noticed the strength of the Thai baht, caused by strong cashinflows from proffesional investors abroad. But ofcourse you know something, that the rest of us mortals don't know?? Q1 result are just ready from all Thai banks, and with exception of the 2 mentioned, they are all doing extremely well .

As for the SET, last year + 36% and so far this year up more than 10%, with good dividends from most companies. Realestate are as we all know, location, location, location.

Yes it can all go south, the world is a dangerous place, but without a ticket, no lotterywin!

Time to turn in, it is late. And despite (or because of) being fully invested in Thailand, I sleep very well!

Goodnight

I liked your previous post.. but I have to ask, do you have access to market trade information which enables you to differentiate between professional trading institutions and standard low level buyers? The other thing to consider too is, big institutions have been wrong in Thailand too, 1997 was not that long ago. I would speculate that the cause of the rise of the baht has nothing to do with professional traders money, however being hot money from both money being chased out of previous safe havens and considering the issues currently being presented in Cyprus (a financial tax haven), Switzerland over the past few years, and shortly Austria, UK and Luxembourg.

You could say indirectly, Germany through its' vision of the Euro has caused the rise in the baht. The performance of the SET index has nothing to do with potential, nor results. When interest rates are low, people do not save. When people do not save, they generally spend what they have. When they spend, prices rice because demand rises. This would normally cause gold prices to rise. Gold has fallen for a reason which I do not fully understand. People are therefore gambling on markets such as the SET, HSI and NKI in an attempt to avoid European turmoil, recent weak economic numbers in the US with an anti-capitalist president presiding over the street, and China weakening. It is my belief that these are false hopes.

[NeverSure]

You don't have to read the fine print, it's a Thai government guarantee

The bank is also owned by the Thai government, so it's double safe. These are the same geniuses who brought Thailand the failed rice scheme, the new minimum wage, easy car loans and no-down home loans.

"...and no-down home loans."

That was the US who also created the wonderful mortgage-backed-securities surprise packages with AAA credit ratings that brought the world the recession we're still clawing our way out of and the Europeans who brought us the everything-is-free-we'll-pay-for-it-later scheme also known as socialized austerity.

Why do you think there have been new threads on an almost daily basis by farang whining about how long they can survive on their dwindling pensions & investments and their savings in their crappy home currencies? Rather than doing your financial planning based on emotional racist assumptions about the innate superiority of banks and investments back in Farang-Ville, why not think further ahead than your next visit to the ATM? The major Thai banks are well-capitalized, solvent and have no liquidity issues. With a little planning the money you spend here doesn't have to be purchased at the worst possible exchange rates.

Or you could plan on Mario Draghi & Co. managing your money for you:

> Bank Of Cyprus Big Depositors To Lose Up To 60 Percent In Bailout

I really don't disagree with anything you say.

What I see in Thailand is a repeat of what the US did, and what so-called investment advisers failed to see.

We'd have to have a discussion on not why the baht is simply strong, but why it is strong compared to other currencies. We'd have to have a discussion about the currency wars taking place in the West and with China and Japan, each trying to drive the value of its currency down to improve its exports and keep its economy going.

[NeverSure]

Non Performing Loans at around 30% Normal if a bank have NPL's around 4%, it is considered high !

It seems like our sharia brothers are taking "sharing loss and profit" a little too litterally! When the news broke a couple of months ago, about the NPL's, people were queueing to take their money out! So prophets or not, stay away, not hal-al !

Yep, that bank also called the IBank is belly up and has been having runs on it by panicked customers. It has asked the government for a bailout.

Another Thai bank, SME, has asked the government for a bailout.

I wouldn't have a single baht in a Thai bank right now. Nor would I have in real estate or the stock market.

Link

What a load of crap! I guess, that even you have noticed the strength of the Thai baht, caused by strong cashinflows from proffesional investors abroad. But ofcourse you know something, that the rest of us mortals don't know?? Q1 result are just ready from all Thai banks, and with exception of the 2 mentioned, they are all doing extremely well .

As for the SET, last year + 36% and so far this year up more than 10%, with good dividends from most companies. Realestate are as we all know, location, location, location.

Yes it can all go south, the world is a dangerous place, but without a ticket, no lotterywin!

Time to turn in, it is late. And despite (or because of) being fully invested in Thailand, I sleep very well!

Goodnight

I liked your previous post.. but I have to ask, do you have access to market trade information which enables you to differentiate between professional trading institutions and standard low level buyers? The other thing to consider too is, big institutions have been wrong in Thailand too, 1997 was not that long ago. I would speculate that the cause of the rise of the baht has nothing to do with professional traders money, however being hot money from both money being chased out of previous safe havens and considering the issues currently being presented in Cyprus (a financial tax haven), Switzerland over the past few years, and shortly Austria, UK and Luxembourg.

You could say indirectly, Germany through its' vision of the Euro has caused the rise in the baht. The performance of the SET index has nothing to do with potential, nor results. When interest rates are low, people do not save. When people do not save, they generally spend what they have. When they spend, prices rice because demand rises. This would normally cause gold prices to rise. Gold has fallen for a reason which I do not fully understand. People are therefore gambling on markets such as the SET, HSI and NKI in an attempt to avoid European turmoil, recent weak economic numbers in the US with an anti-capitalist president presiding over the street, and China weakening. It is my belief that these are false hopes.

I agree with everything you're saying, except I wouldn't give the credit for the rise in the baht solely to the euro or any other one currency.

No I don't have any access to inside information nor do I want it. The professionals have a horrible track record as you know. They HAVE to follow the herd.

Here's something a lot of people don't understand about professional money managers. They are stuck following the crowd. If they don't, they can look like fools, and if they do, they can simply say "I called it like everyone else did."

A professional money manager is finished if he calls a bear market, pulls his clients out, and the market then soars. He isn't finished if his clients take a bath when the market drops and all other managers' clients take a bath. He can blame that on the market and compare himself to everyone else.

Again, as for the baht, it isn't possible to say it is strong, without at least mentally adding "compared to other currencies." Thailand is trapped in a world where the big economies are deliberately driving the value of their currencies down to boost exports and their economies. China is doing that as well as the major Western countries.

Thailand HAS to pay higher interest rates (which attracts foreign money) because they are an emerging market and considered riskier than, say, the British Pound. It is the deficits Thailand is running, causing the need to sell bonds (borrow money) which is holding the rates up. Thailand has to pay a premium for the assumed risk. Thai banks have to pay a premium for their assumed risk in the form of higher interest rates. People who believe the risk isn't that great move money into Thailand to get those higher rates. That currency exchange drives the relative value of the baht up. People buying baht to deposit or invest = more demand for baht = higher price.

Mind you, all of this can reverse almost overnight. All it would take would be a few bank failures, an acknowledgement of a real estate bubble endangering bank loans, and a few too many people wanting their baht traded back into Pounds, and you have a calamity.

There is a reason that Thailand won't let people expatriate large sums of money in its banks. Where did you last hear that happening? It wouldn't be in Cyprus, would it?

[Estrada]

Learn to read Thai, it is not 3.4% per month, there is the word "deuan" against the figure 9, meaning 9 "months" The offer on their web site clearly states 3.4% interest at the end of 9 months time deposit. They also offer 3.30% if you deposit your money for 6 months. A word of warning which applies to all Thai Banks offering high interest time deposit: At the end of the 9 month period they will automatically reduce your time deposit interest to the minimum interest rate whereas their sales literature implies that if you do not close the account it would be rolled over to a new high interest rate available at the end of 9 months. What I do is go to the bank the day after the end of the 9 month period and open a new time deposit account at the latest rate.

Here is the link: http://www.ibank.co.th/2010/en/promotion/

I keep B800,000 in a time deposit as Immigration now accepts Time Deposits shown in a Thai Bank Passbook against extension of stay based on retirement. It also serves as an emergency fund against medical fees etc.

[Card]

A fellow explained the inflow of money to a few of us old geezers the other day.

A lot of this is ill gotten money which has been held outside Thailand for the benifet of the corrupt. With the anti laundering overhaul the banks are going to impose, people are moving funds back so they will have easier access to the funds.

I did note this self proclaimed expert and his theories, yes there were more, had consumed about a bakers dozen, good stiff drinks. But he was buying for the audience, so we were duty bound to half way listen.

Much of the inflow of foreign funds is to buy Thai government bonds by foreign investors. The Thai govt is issuing quite a lot due to fiscal deficits.

[Sophon]

Learn to read Thai, it is not 3.4% per month, there is the word "deuan" against the figure 9, meaning 9 "months" The offer on their web site clearly states 3.4% interest at the end of 9 months time deposit. They also offer 3.30% if you deposit your money for 6 months. A word of warning which applies to all Thai Banks offering high interest time deposit: At the end of the 9 month period they will automatically reduce your time deposit interest to the minimum interest rate whereas their sales literature implies that if you do not close the account it would be rolled over to a new high interest rate available at the end of 9 months. What I do is go to the bank the day after the end of the 9 month period and open a new time deposit account at the latest rate.

Here is the link: http://www.ibank.co.th/2010/en/promotion/

I keep B800,000 in a time deposit as Immigration now accepts Time Deposits shown in a Thai Bank Passbook against extension of stay based on retirement. It also serves as an emergency fund against medical fees etc.

A couple of minor clarifications. Amongst the rules for the term deposit as stated on the website it also mentions:

< Thai language removed, this is the English Language side of the forum, English is the only acceptable language. If you want to post in Thai, you can do so in the Thai Language forum. >

which means that interest is paid monthly, not at the end of the 6 or 9 months period. And the interest paid is not 3.4% but 3.4% p.a.

Sophon

Edited April 29, 2013 by metisdead

[rotary]

Because usery or interest on loans is haram, they found a loophole, religion is endlessly amusing.

All the Islamic banks around the world do the "profit" thing. Now in the middle east in some countries the Islamic banks are loaning money to expats for 3 years or less at 1.99% profit. I know several guys who took $100,000 or more to buy houses outside in their home country. "Profitable" for the bank and the guy that borrows I guess compared to western banks.

[HerbalEd]

Information

The Islamic Bank of Thailand was set up by the Islamic Bank of Thailand Act B.E. 2545 (2002), as a state enterprise under the Ministry of Finance, administered by a board of governors, with an advisory council on Islamic banking. The bank operates in accordance with the rules of Sharia, or the Islamic rules on transactions.

The basic principle of Islamic banking is the sharing of profit and loss and the prohibition of the payment of fees for the renting of money, or businesses related to profiteering, monopolizing, or vices. In an Islamic hire-purchase transaction, instead of loaning the buyer money to purchase the item, the bank buys the item from the seller, and resells it to the buyer at a profit, while allowing the buyer to pay the bank in installments, while asking for strict collateral. The bank customer thus pays a monthly fixed amount, making his financial planning easier.

There are presently 26 branches of the Islamic Bank of Thailand, scattered in all regions of the country. Pattani has two branches, one in the city, the Pattani Branch, and Chabang Tiko Branch in Chabang Tiko subdistrict, in Mueang district of Pattani, both making a substantial profit each month.

So basically, it's a bank.

Yeah ... that's why it's called a bank. No secrets here.

[TheGhostWithin]

Wonder if they would loan me money for a bacon farm.

Or a bible factory.. or a church.. or an "I love bush" T shirt manufacturing firm..

[falang07]

 

...CIMB Thai offers 3,30 % 12 months and their rating is AA if i need to choose i know where I go

 

Yeah, those ratings are really "helpful". Did you know that all those filthy banks that went bankrupt in 2008 all got top ratings? Just a bunch of lies.

[winstonc]

thanks neversure,,,couldnt concentrate after thinking about a bacon sandwich,,,,,,now wers my hp sauce,,,

[TheGhostWithin]

In the us I'm hardly getting 3.4% with stock dividends.I'd say that's A good deal if it's A secure bank.

And I assume that your stocks have had no capital growth either? Almost all stocks which provide a divided consider dividend only a component of total investment growth for an investor. Understanding that growth is only realised on the sale of the stock.

I missed a 2% or so gain in the past week, because I had my funds in cash. I have just switched my funds to stocks. Why? Global banks are again reaffirming they are not raising rates, with some speculation of even interest rate cuts for some (e.g. the atrocious bureaucratic mess which is the EU and the ECB). When interest rates are low, stocks rise. I will look to pull these out on high sentiment and prior to US and EU interest rate decisions as they flow out.

[jbrain]

Non Performing Loans at around 30% Normal if a bank have NPL's around 4%, it is considered high !

It seems like our sharia brothers are taking "sharing loss and profit" a little too litterally! When the news broke a couple of months ago, about the NPL's, people were queueing to take their money out! So prophets or not, stay away, not hal-al !

Yep, that bank also called the IBank is belly up and has been having runs on it by panicked customers. It has asked the government for a bailout.

Another Thai bank, SME, has asked the government for a bailout.

I wouldn't have a single baht in a Thai bank right now. Nor would I have in real estate or the stock market.

Link

But, but........I always read on this forum that the Thai banks are so healthy and that they have learnt form the 1997 crisis .

[jbrain]

In the us I'm hardly getting 3.4% with stock dividends.I'd say that's A good deal if it's A secure bank.

And I assume that your stocks have had no capital growth either? Almost all stocks which provide a divided consider dividend only a component of total investment growth for an investor. Understanding that growth is only realised on the sale of the stock.

I missed a 2% or so gain in the past week, because I had my funds in cash. I have just switched my funds to stocks. Why? Global banks are again reaffirming they are not raising rates, with some speculation of even interest rate cuts for some (e.g. the atrocious bureaucratic mess which is the EU and the ECB). When interest rates are low, stocks rise. I will look to pull these out on high sentiment and prior to US and EU interest rate decisions as they flow out.

Please post back your results here next year.

[corkythecat]

The Rating Agencies were complicit in the creditworthiness of many of the "Junk" issuances during the financial meltdown. They admitted that they never understood all the various packages (I have a video by an ex employee, using math that seemed to belong to cosmology)) and that their own income was received from the financial institutions issuing the junk. BTW I being a mere Engineer I have never understood ...."when X bank/employee loses Y billion dollars by bad judgement (gambling ?) who gains those billions. Googling this stuff seemed to send me on a circular loop. Can anyone kindly enlighten me, since we do have at some knowledgeable posters here.? Loved the one about the "prophets", restores my faith in TV. 3.4 % Peanuts ! Bernie Madoff paid at least 10%

Edited April 29, 2013 by corkythecat

[Braddockrd]

Amazing how much waste people create just because they are bored. The question by the OP was whether 3.4% per month was credible. The ONLY answer relevant to the posting is the one by Naam, which clarifies that it is 3.4 per annum, which sounds completely logic. Of course no one ever except Madoff would be able to offer 3.4% per month!.

[NeverSure]

The Rating Agencies were complicit in the creditworthiness of many of the "Junk" issuances during the financial meltdown. They admitted that they never understood all the various packages (I have a video by an ex employee, using math that seemed to belong to cosmology)) and that their own income was received from the financial institutions issuing the junk. BTW I being a mere Engineer I have never understood ...."when X bank/employee loses Y billion dollars by bad judgement (gambling ?) who gains those billions. Googling this stuff seemed to send me on a circular loop. Can anyone kindly enlighten me, since we do have at some knowledgeable posters here.? Loved the one about the "prophets", restores my faith in TV. 3.4 % Peanuts ! Bernie Madoff paid at least 10%

It depends. If you were the last one to buy the golden tulip for a cool mil, and had to sell it for a pence, the last guy to sell it, and perhaps others along the way made money. But in this case value evaporated into nothing so all was lost.

If I package a bunch of bad real estate loans and sell them as good loans (I might even call them derivatives if they are just derivatives) then a lot of people made money with one loser. The mortgage broker got his cut, then he sold it into what's called the "secondary market" of which there are plenty, and that secondary market, in order to free up cash to buy more sells the bundle at a profit to a bundler. The bundler then sells them at a profit to the ultimate loser.

So the simple answer to your question is the last holder who sold them and all before him make the money, with an ultimate loser.

[NeverSure]

Amazing how much waste people create just because they are bored. The question by the OP was whether 3.4% per month was credible. The ONLY answer relevant to the posting is the one by Naam, which clarifies that it is 3.4 per annum, which sounds completely logic. Of course no one ever except Madoff would be able to offer 3.4% per month!.

I disagree. The OP also said that if this was so he was going to put his money in there.

That triggered the safety comments.

[bjohn34]

The Rating Agencies were complicit in the creditworthiness of many of the "Junk" issuances during the financial meltdown. They admitted that they never understood all the various packages (I have a video by an ex employee, using math that seemed to belong to cosmology)) and that their own income was received from the financial institutions issuing the junk. BTW I being a mere Engineer I have never understood ...."when X bank/employee loses Y billion dollars by bad judgement (gambling ?) who gains those billions. Googling this stuff seemed to send me on a circular loop. Can anyone kindly enlighten me, since we do have at some knowledgeable posters here.? Loved the one about the "prophets", restores my faith in TV. 3.4 % Peanuts ! Bernie Madoff paid at least 10%

It depends. If you were the last one to buy the golden tulip for a cool mil, and had to sell it for a pence, the last guy to sell it, and perhaps others along the way made money. But in this case value evaporated into nothing so all was lost.

If I package a bunch of bad real estate loans and sell them as good loans (I might even call them derivatives if they are just derivatives) then a lot of people made money with one loser. The mortgage broker got his cut, then he sold it into what's called the "secondary market" of which there are plenty, and that secondary market, in order to free up cash to buy more sells the bundle at a profit to a bundler. The bundler then sells them at a profit to the ultimate loser.

So the simple answer to your question is the last holder who sold them and all before him make the money, with an ultimate loser.

Great investing advice. - "never be the last fool!"

[NeverSure]

The Rating Agencies were complicit in the creditworthiness of many of the "Junk" issuances during the financial meltdown. They admitted that they never understood all the various packages (I have a video by an ex employee, using math that seemed to belong to cosmology)) and that their own income was received from the financial institutions issuing the junk. BTW I being a mere Engineer I have never understood ...."when X bank/employee loses Y billion dollars by bad judgement (gambling ?) who gains those billions. Googling this stuff seemed to send me on a circular loop. Can anyone kindly enlighten me, since we do have at some knowledgeable posters here.? Loved the one about the "prophets", restores my faith in TV. 3.4 % Peanuts ! Bernie Madoff paid at least 10%

It depends. If you were the last one to buy the golden tulip for a cool mil, and had to sell it for a pence, the last guy to sell it, and perhaps others along the way made money. But in this case value evaporated into nothing so all was lost.

If I package a bunch of bad real estate loans and sell them as good loans (I might even call them derivatives if they are just derivatives) then a lot of people made money with one loser. The mortgage broker got his cut, then he sold it into what's called the "secondary market" of which there are plenty, and that secondary market, in order to free up cash to buy more sells the bundle at a profit to a bundler. The bundler then sells them at a profit to the ultimate loser.

So the simple answer to your question is the last holder who sold them and all before him make the money, with an ultimate loser.

Great investing advice. - "never be the last fool!"

Right, but most of us can't tell we're going to be the last fool. We buy when stocks are high, when gold is high, when real estate is high, when a currency is high... We like to get in on the winnings. Everyone likes to join the winners.

Usually by the time most of us see a bull market, the first buyers have already made their money. Then they sell, crashing the market and we are left holding the bag.

Then when things crash and prices are cheap, we refuse to buy. No one wants to buy a loser. But, we are supposed to buy low and sell high. Psychologically, that's hard to do. It's hard to decide to plow into a stock market that has just crashed, or a housing market or anything else that others are fleeing. It's hard.

Edited April 29, 2013 by NeverSure

[yoshiwara]

The Rating Agencies were complicit in the creditworthiness of many of the "Junk" issuances during the financial meltdown. They admitted that they never understood all the various packages (I have a video by an ex employee, using math that seemed to belong to cosmology)) and that their own income was received from the financial institutions issuing the junk. BTW I being a mere Engineer I have never understood ...."when X bank/employee loses Y billion dollars by bad judgement (gambling ?) who gains those billions. Googling this stuff seemed to send me on a circular loop. Can anyone kindly enlighten me, since we do have at some knowledgeable posters here.? Loved the one about the "prophets", restores my faith in TV. 3.4 % Peanuts ! Bernie Madoff paid at least 10%

It depends. If you were the last one to buy the golden tulip for a cool mil, and had to sell it for a pence, the last guy to sell it, and perhaps others along the way made money. But in this case value evaporated into nothing so all was lost.

If I package a bunch of bad real estate loans and sell them as good loans (I might even call them derivatives if they are just derivatives) then a lot of people made money with one loser. The mortgage broker got his cut, then he sold it into what's called the "secondary market" of which there are plenty, and that secondary market, in order to free up cash to buy more sells the bundle at a profit to a bundler. The bundler then sells them at a profit to the ultimate loser.

So the simple answer to your question is the last holder who sold them and all before him make the money, with an ultimate loser.

Then you misunderstand financial crisis if you think there is just one ultimate loser. You really haven't studied finance or economics have you?

[lineofentry]

So it's a dodgy bank run by dodgy people with dodgy customers and a dodgy guarantee giving a dodgy return and all set up to appease a dodgy religion. I don't think I'll join the queue.

[Oxpilot]

KrungSri offers 3.6% on a regular savings account with 2 withdrawals allowed per month. On this account there is no tax on the first 20,000 baht interest. On my 3 month term deposit at Bangkok Bank I got 3.2% on 800,000 baht that I keep for visa renewal. The interest was something around 7,500 and they took out around 1500 for taxes. Then after the 6 months they automatically drop the interest to 1.5% for the next 3 months.

I withdrew the 800k and moved it to Krung Sri. They also have a plan for 9 months. @.1% first 3 months, 2.6% next 3 months, 2 months at 3% and 9% the last one month. Those are not the exact percentages, but as close as I can remember.I don't have a compound interest calculator but even with 9% on the last month I don't think it works out to much more than 3.5% and you lose oif you withdraw early plus it is taxed.

Just check when the interest is paid and if the deal has changed or there is a better deal elsewhere move your money,

I wouldn't support an Islamic bank if they paid 100% interest, but then again I am an American.

[Oxpilot]

I forgot to say that the interest rates are calculated on a per annum basis, I thought that was understood by the OP.

[lucjoker]

the rate is 3.5% /year

but they pay intrest out (1/12th) every month.

Same as kasikorn bank.

But if you ask "is it 3.5% EVERY month ?"

They probably dont understand ....and answer "yes"

You should know by now? Yes ? or Yes?

[zoran1]

Sounds pretty immoral to put your money on a religious bank like that

Money does not care about religion