Boom Time For Fixed Deposits

[george]

Boom time for fixed deposits

Rising interest rates make savings method more attractive

BANGKOK: -- Six-month fixed deposit accounts have enjoyed a boom in popularity this year, Bank of Thailand (BOT) data showed yesterday.

At the end of February, deposits in six-month accounts totalled Bt546.9 billion, up 75 per cent on the same period last year, according to the data.

The figure far exceeded the 10-per-cent growth recorded by banks for total savings.

Six-month deposits account for 8.5 per cent of total savings while regular accounts represent 42 per cent.

Bank accounts have become increasingly popular with top-level savers. In the first two months of the year, the total value of accounts containing in excess of Bt500 million each grew 260 per cent on the same period last year.

One-year fixed deposits have also grown in popularity, with their total value rising to Bt529.4 billion at the end of February, up 36 per cent on the same period last year.

About 68 per cent of the increase came from the growth in the value of major accounts worth in excess of Bt500 million each.

The value of three-month fixed deposits rose 17 per cent to Bt1.7 trillion. These account for 27 per cent of the total value of savings accounts, the largest share of any of the fixed-term options.

The shift into cash deposits is mostly due to people expecting interest rates to continue to rise, based on the fact that the BOT policy rate has edged up steadily since August 2004.

Depositors moved cash from low-yield regular accounts to high-yielding fixed deposits to earn better rates.

However, the value of fixed-deposit accounts with a longer than two-year term contracted nearly 6 per cent from last year to Bt403.6 billion.Regular savings accounts fell slightly by 0.4 per cent to Bt2.7 trillion.

The trend was most pronounced among high-income savers holding accounts containing more than Bt200 million.

The BOT believes the Bt73-billion sale of Shin Corp to Singapore's Temasek contributed to these trends at commercial banks.

On the size of cash deposits, the BOT found the total value of accounts holding between Bt200,000 and Bt500,000 each had risen by 37 per cent to Bt362.4 billion at the end of February.

The total value of accounts containing more than Bt500 million each rose 28 per cent to Bt651 billion.

--The Nation 2006-04-18

[tuky]

For the first time I have been able to show my wife the wisdom of keeping our exess cash in fixed term accounts. When shown the end result of the 10 month deal we used she was over the moon.

This is a good chance to show the scared ones that money sitting in a savings account is a waste of time.

[sua yai]

I'm no economist, but if you want to stop people borrowing money, you raise the interest rate. The savers then win.

I thought the idea of raising interest rates was to try to decelerate the amount of money flying around an economy.

Maybe we won't see so many SUV vehicles with red plates driven by people who are taking the next millenium to pay the debt off.

[astral]

What are the current rates?

Are they available to foreigners??

[sua yai]

Regardless of interest rates, how long a person has been here and all the rest, can a farang legally own anything?

I suppose there are loopholes and there you all go.

[lingling]

What are the current rates?

Are they available to foreigners??

5.125% for a 10 month deposit @ BBL. Some promotion thing they are running this month only (and available on 10 month deposits only).

http://www.bbl.co.th/bangkok+bank+thai/web...posit+rates.htm

[Mobi]

What are the current rates?

Are they available to foreigners??

5.125% for a 10 month deposit @ BBL. Some promotion thing they are running this month only (and available on 10 month deposits only).

http://www.bbl.co.th/bangkok+bank+thai/web...posit+rates.htm

4.5 % for an 8 month deposit at Kasikorn Thai. Limited offer period, available to foreigners.

[george]

Now you get 6.7% in Singapore, 8 month deposit.

[Heng]

It's only the beginning.

And the world over, the savers generally win regardless.

[Khun Bob]

Which bank/institution offers this ?

Is it only available in Singapore $ ?

Now you get 6.7% in Singapore, 8 month deposit.

[chuang]

Now you get 6.7% in Singapore, 8 month deposit.

If I am not mistaken there is no bank in Singapore offering this rate....

[lingling]

What are the current rates?

Are they available to foreigners??

5.125% for a 10 month deposit @ BBL. Some promotion thing they are running this month only (and available on 10 month deposits only).

http://www.bbl.co.th/bangkok+bank+thai/web...posit+rates.htm

My wife, my son and I went to BBL (the one next to Chuwit Park) and tried to deposit his half million baht in savings in one of those 5.125% FD accounts.

My son is luuk krung (5 years old, thai and european citizenship), both parents were present, all three had valid photo identification (my wife had thai ID card, my son his thai passport, me my EU and thai drivers license etc). However, the nice customer service lady came up with a hundred reasons why he was not welcome as a customer (she wanted to see birth certificate, tabien baan, my work permit etc etc).

Not wanting to spend all day walking around with a backpack full of cash we went to SCB down the road and opened a 12 month fixed deposit account with 4% interest. No problems at all - all they needed to see was my wife's ID and a couple of signatures.

BBL is still the same customer-unfriendly place as it was last time I used them (~5-6 years ago).

[samran]

Ling Ling,

I could be wrong, but given money laundering laws I would think most banks would be quite tetchy about opening a savings account for someone with a backpack full of money. The money could have come from anywhere.

[samran]

one other point, I think this is only the beginning of the compeition. The first bank which clicks onto the concept of opening up high interests online banking service, similar to your ING Direct type service in the UK, Australia and the US, will be the big winner.

These Long Term accounts are only the first volley's in banking war for your savings dollar (or baht).

[kerryk]

ANZ bank Singapore between 4% and 5% for one month deposits depending on what currency you keep the money in. I can keep money in Baht there but they don't pay interest on Baht. US Dollars is 4.something% for a month.

[lingling]

Ling Ling,

I could be wrong, but given money laundering laws I would think most banks would be quite tetchy about opening a savings account for someone with a backpack full of money. The money could have come from anywhere.

Well, they came from my son's savings account @ Kasikorn that we had just closed, and we had documentation to prove that (KBANK passbook, withdrawal slips etc). However, BBL were not interested in that - they clearly just did not want our business. Anyway, SCB were happy to open an account so although 1% less in interest I prefer to do business with bankers who don't have their heads up their a**.

[lingling]

one other point, I think this is only the beginning of the compeition. The first bank which clicks onto the concept of opening up high interests online banking service, similar to your ING Direct type service in the UK, Australia and the US, will be the big winner.

These Long Term accounts are only the first volley's in banking war for your savings dollar (or baht).

...either that, or the bankers know that another financial crisis is sailing up within a couple of months. If the THB-USD rate will be back to 45 in a month then it is easy to increase the interest rates on fixed deposits...

[samran]

ANZ bank Singapore between 4% and 5% for one month deposits depending on what currency you keep the money in. I can keep money in Baht there but they don't pay interest on Baht. US Dollars is 4.something% for a month.

And then the Sing/US/Australian dollar takes a dive versus the baht and your interest gains are wiped out.

With comparable products available in Thailand, probably best to keep your money in the same currency you wish to spend it.

[griffer]

link for current comparative rates in thailand:

http://www.bot.or.th/bothomepage/databank/.../interest_e.asp

[bluedragon]

Ok, question.

I live in Japan and travel to Thailand occasionally, can I open a bank account there, and

if so what do I need, and any suggestions on the bank would help.

Regards, BD