Bangkok Bank To Offer 10-mo Fixed Deposit Rate At 5.125%

[george]

Bangkok Bank To Offer 10-Mo Fixed Deposit Rate At 5.125%

BANGKOK: -- Bangkok Bank PCL (BBL.TH), Thailand's largest commercial lender, said Thursday it is offering a generous rate of 5.125% on 10-month fixed deposits of THB100,000 and above.

The new deposit account adds to the bank's current offering of three-, six, 12- and 24-month deposits. The rate on the new 10-month account is attractive considering 12-month deposits return just 3.75%-4.25%, depending on the amount of the deposit.

The offer, which must be taken up between Friday and end-April, is aimed at boosting the bank's deposit base, a bank official said.

The rate is also attractive compared with levels offered by the bank's rivals.

Kasikornbank PCL (KBANK.TH), Thailand's third largest bank, last week launched a special 8-month fixed deposit, offering a rate of 4.50%. Bank of Ayuhdya PCL (BAY.TH) earlier this week introduced a similar package, offering 4.50% for 8-month fixed deposits.

--Yahoo! Finance 2006-03-30

[Heng]

The other banks will probably match them, but it's still sweet news. Just like the good ol' days.

[Maigo6]

The other banks will probably match them, but it's still sweet news. Just like the good ol' days.

Certainly is sweet news, a return to the 15% interest for long term deposits of over 1,000,000 baht that were available in the early 90's would be even sweeter.

[PeaceBlondie]

Back home, the bank that gave me slightly over 2% on a $10,000 certificate of deposit, for 25 months, is already up to 5% and rising. When it comes due in May, we hope to get 5.25%. Roughly two and a half times the prior yield, on the same commerical instrument. Wow! What a difference two years makes.

[samran]

The other banks will probably match them, but it's still sweet news. Just like the good ol' days.

Certainly is sweet news, a return to the 15% interest for long term deposits of over 1,000,000 baht that were available in the early 90's would be even sweeter.

No thanks....15% is a sign of a sick economy...I'm happy with my interest rates low.

[think_too_mut]

Back home, in Oz, any bank would give you 5.4% interest on any money you put in.

The interest is paid in any (inside the country) account the last day of the month.

The catch is - that account has no ATM, nothing. Your interest is paid to any nominated account. Withdraw your money any time you wish, no time caps.

Thai banks are trailing.

[Digger]

Back home, in Oz, any bank would give you 5.4% interest on any money you put in.

The interest is paid in any (inside the country) account the last day of the month.

The catch is - that account has no ATM, nothing. Your interest is paid to any nominated account. Withdraw your money any time you wish, no time caps.

Thai banks are trailing.

But there is a big difference - Thai's cannot legally take out more than 50,000 baht from the country without permission from the Bank Of Thailand. Therefore to all intents & purposes they are forced to keep their money in Thailand. Therefore anything is better than nothing.

[think_too_mut]

Back home, in Oz, any bank would give you 5.4% interest on any money you put in.

The interest is paid in any (inside the country) account the last day of the month.

The catch is - that account has no ATM, nothing. Your interest is paid to any nominated account. Withdraw your money any time you wish, no time caps.

Thai banks are trailing.

But there is a big difference - Thai's cannot legally take out more than 50,000 baht from the country without permission from the Bank Of Thailand. Therefore to all intents & purposes they are forced to keep their money in Thailand. Therefore anything is better than nothing.

I did not say it but on my mind was whether should I buy a property in Thailand and get some rental returns.

As it works out - better to keep the money in that 5.4% interest fund in Oz than buying in Thai.

At least, the money is at my disposal (even over the Internet), no need to wait for real estate agents to sell the property if I want my money back.

Rental returns in Thai are uncertain and when you get it it's underperforming.

Try to sell a second hand property there - tens of thousand apartments that nobody wants would be competing with yours.

[Hope Immanence]

I am a total finance newbie, flame as you will:

With fixed-term deposits, is the interest-let's say 5.25%- paid on the prinicipal each month for the term's life, or is the 5.25% paid at the end of the fixed-term?

[bmanly]

Back home, in Oz, any bank would give you 5.4% interest on any money you put in.

The interest is paid in any (inside the country) account the last day of the month.

The catch is - that account has no ATM, nothing. Your interest is paid to any nominated account. Withdraw your money any time you wish, no time caps.

Thai banks are trailing.

You are correct however there is one bank in OZ that does give 5.5% at call with an ATM card. I have been using it for 4 years and works very well for me, here is the link: Citibank Online Manager

Back home, in Oz, any bank would give you 5.4% interest on any money you put in.

The interest is paid in any (inside the country) account the last day of the month.

The catch is - that account has no ATM, nothing. Your interest is paid to any nominated account. Withdraw your money any time you wish, no time caps.

Thai banks are trailing.

But there is a big difference - Thai's cannot legally take out more than 50,000 baht from the country without permission from the Bank Of Thailand. Therefore to all intents & purposes they are forced to keep their money in Thailand. Therefore anything is better than nothing.

I did not say it but on my mind was whether should I buy a property in Thailand and get some rental returns.

As it works out - better to keep the money in that 5.4% interest fund in Oz than buying in Thai.

A few of my friends are doing this in Pattaya right now. They live in 1 condo and rent out the other. Usually they rent to other farangs who are known to them and they rent for fair market value so both sides are happy.

I am a total finance newbie, flame as you will:

With fixed-term deposits, is the interest-let's say 5.25%- paid on the prinicipal each month for the term's life, or is the 5.25% paid at the end of the fixed-term?

Generally speaking with fix term deposits you get your income at the end of the terms life, however some banks are offering the Monthly option. You have to ask them if this is avaiable.

My opinion is, why invest at 5.15% with BBL for a 10 Month term when you can invest in an at call account in a farang country like Australia or New Zealand and get 5.5%? I came back from NZ last week, the banks there were offering 7.4% on a 90 day term and 8% on a 2 year term which is even better. Of course for Thai Nationals they might not have a choice.

[Meerkat]

My opinion is, why invest at 5.15% with BBL for a 10 Month term when you can invest in an at call account in a farang country like Australia or New Zealand and get 5.5%? I came back from NZ last week, the banks there were offering 7.4% on a 90 day term and 8% on a 2 year term which is even better. Of course for Thai Nationals they might not have a choice.

Hmm...if you'd bought THB 1m worth of NZD at the end of last year at 28.08, popped it in a 90 day depo at 7.40% and brought it back to THB at the end of last month (at 23.96), you'd have made a whopping...er...loss of THB 131,154! Similarly you'd have lost THB 65,000 doing the AUD trade at 5.50%. Those rates are the interbank rates as well; you'd never get near that in the retail FX market.

This is what so many people don't understand. Future FX fair-rates are simply a function of interest rate differentials. As soon as you transfer funds out of your "home" currency you're taking a punt on the FX; you might get lucky, but that's all it is.

If you really wanted to fully hedge yourself against adverse future FX movements, you'd basically have to either enter a forward FX trade, or buy an option. Guess what? The cost of those hedges will effectively bring you back to square one. Why? Because that's what interbank traders do day-in and day-out - whittling away at any fleeting arbitrage opportunity...

Edited April 2, 2006 by Meerkat

[samran]

My opinion is, why invest at 5.15% with BBL for a 10 Month term when you can invest in an at call account in a farang country like Australia or New Zealand and get 5.5%? I came back from NZ last week, the banks there were offering 7.4% on a 90 day term and 8% on a 2 year term which is even better. Of course for Thai Nationals they might not have a choice.

Hmm...if you'd bought THB 1m worth of NZD at the end of last year at 28.08, popped it in a 90 day depo at 7.40% and brought it back to THB at the end of last month (at 23.96), you'd have made a whopping...er...loss of THB 131,154! Similarly you'd have lost THB 65,000 doing the AUD trade at 5.50%. Those rates are the interbank rates as well; you'd never get near that in the retail FX market.

This is what so many people don't understand. Future FX fair-rates are simply a function of interest rate differentials. As soon as you transfer funds out of your "home" currency you're taking a punt on the FX; you might get lucky, but that's all it is.

If you really wanted to fully hedge yourself against adverse future FX movements, you'd basically have to either enter a forward FX trade, or buy an option. Guess what? The cost of those hedges will effectively bring you back to square one. Why? Because that's what interbank traders do day-in and day-out - whittling away at any fleeting arbitrage opportunity...

One of the greatest posts I have ever read on this site. Puts paid to the myth that you can print money simply by sending it to a higher interest rate juristiction. Interest rate vs Exchange rate. One gives, one takes...

[monty]

I think the major factor determining where to keep your spending money, is the location where you are going to need that money!

What's the point of putting your money in a country you do not even want to visit anymore?

I live in Thailand and plan (hope) to do so until my candle gets blown out!

I put my cash savings in Thailand, get 5.125% interest and I'll know exactly how much It'll be worth in one year (in Thai Bath, the money I need to buy food and beer...).

When I put it anywhere else, I'll never have any idea where I'm going to be financially in one year. If the Bath devalues, I'll be stinking rich Bath wise, but if the Bath appreciates, I doubt the extra interest rate will cover the FX difference...And only the good Lord knows what all these other currencies are up to!

Now maybe someday I'll be rich enough to spread my cash wealth over several currencies to hedge myself against any FX fluctuations

Cash should in my opinion be only a small part of your savings anyway, leave what you don't need in the immediate future (like the next 10 to 15 years) in the capable hands of proffesional funds managers...

No point in stashing your complete worth in cash deposits, you'd be lucky if you'd keep up with inflation...

Edited April 2, 2006 by monty