How to safely invest 10 Mio. with fixed return?

[JSixpack]

But money invested in cash deposits - ANYWHERE in the world - is guaranteed to lose every single time because cash interest rates are always lower than inflation.

an incorrect generalising statement. if one locks long term in any high yielding asset (including cash) during a period of high inflation the results are excellent positive yields.

good examples are GBP and USD end 70s beginning 80s. those with long term fixed deposits and long Gilts or UST minted money.

Which is why I used the term cash deposits, Naam. You are talking about longer term deposits. I don't call that cash; cash is either immediately accessible or accessible in the short term.

Short term - 30-60 day - do not pay anywhere near inflation. And, yet, ironically, people thing this sort of saving vehicle is the safest of all

Why not get your own little personal definitions and terminology straight and clear before you post? You did use the term investing in cash deposits, which, as turns out, merely meant investing cash in cash (of the same currency), which either makes no sense or is so trivial as not merit posting.

Naam gave you credit for actually making an intelligent point, which he then proceeded, quite rightly, to qualify.

Edited October 1, 2013 by JSixpack

[yoshiwara]

Not wishing to sound glum but does this Government guarantee cover farang accounts after all we are living in AMAZING THAILAND anything can happen as it seems rules are made up as they go along I would take a flight to Singa's and open an offshore with HSBC and have the purchasers put the funds direct into that account I did this and had no problems.

What would I actually do? I would seriously consider (as above) try to open an account in Singapore or Hong Kong, put 5 million baht equivalent into HSBC shares currently paying around 4.5%, 2.5 million baht in HKD cash for emergency/something else, and keep 2.5 million in baht in Thailand on deposit/for use.

[scobie redux]

But money invested in cash deposits - ANYWHERE in the world - is guaranteed to lose every single time because cash interest rates are always lower than inflation.

an incorrect generalising statement. if one locks long term in any high yielding asset (including cash) during a period of high inflation the results are excellent positive yields.

good examples are GBP and USD end 70s beginning 80s. those with long term fixed deposits and long Gilts or UST minted money.

Which is why I used the term cash deposits, Naam. You are talking about longer term deposits. I don't call that cash; cash is either immediately accessible or accessible in the short term.

Short term - 30-60 day - do not pay anywhere near inflation. And, yet, ironically, people thing this sort of saving vehicle is the safest of all

Why not get your own little personal definitions and terminology straight and clear before you post? You did use the term investing in cash deposits, which, as turns out, merely meant investing cash in cash (of the same currency), which either makes no sense or is so trivial as not merit posting.

Naam gave you credit for actually making an intelligent point, which he then proceeded, quite rightly, to qualify.

I disagree. Most people understand that cash investments are things like instant savings accounts or short term deposits. It is a generic term.

Naam expanded it to include such investment vehicles as long term time deposits and, indeed, even started to include government bonds. An investment in government bonds is not a cash deposit - it comes with completely different sets of risk related to yields and capital value.

[Pib]

The only thing I would add is to watch out for the terms of the interest rate. Bangkok Bank have a deposit account that looks attractive at 3.25% but, written in Thai, this is only for six months after which it reverts to the basic 0.1%. There are other banks that offer slightly less but for the whole year. You will be taxed at source on the interest (7%).

Maybe you could point out the deposit account you are talking about on the Bangkok Bank web site which has excellent information in both Thai and English. The only deposit account I'm aware of by Bangkok Bank that will pay 3.25%pa is their current promotion on a 15 month fixed term saving account (which I signed up for last month...after by most recent 7 month fixed term account matured). The 15 month fixed account pays 3.25%pa for the entire 15 months...after it matures in 15 month if a person don't go in an roll it over to another deposit problem the account automatically rolls over in a 3 month fixed term currently paying 1.625%pa...typical of how most fixed account work.

Here's a link to the current Bangkok Bank promotion which includes the 15 month/3.25% and the associated rules in very clear English. But a person would need to open an account by 16 Oct...and that don't mean the account starts earning something less than 3.25% after 16 Oct, it just means that promotion won't be available no more. Come the end of the current promotion the bank will roll out new promotions for certain fixed terms...that's always the best time to get into certain fixed term deposits. Also here's a link showing all of the current Bangkok Bank deposits rates. Excluding the current/checking account, the lowest rate paid is 0.75% for the regular savings account.

You must be thinking the 7% VAT you pay for most products/services like buying something at Lotus; this is not applicable to bank accounts. The withholding tax for most fixed accounts is 15%.

The account I was referencing was on offer over a year ago and my bank branch did not have the English translated leaflet. When I spoke to a manager about this I was told that if I tried to close the account they would make me a better offer. Thanks for the tax info. Since we all pay tax why can't we have some of the benefits. Ooops! Sorry not this thread.

I hear you...it's usually hard to find much if any English language leaflets in most any Thai bank, even the ones in Bangkok. But the Bangkok Bank website, which is in both Thai and English, definitely has a lot of English language info/details on their products/services. Other Thai bank websites, even Kbank or SCB, don't even come in a close 2nd when it comes to the amount and level of English language banking info on the Bangkok Bank website. Heck, since most Thai banking products/services are very similar since all the Thai banks must follow Bank of Thailand regulations, Thai laws, etc.sthe Bangkok Bank website is a good place to get general info on Thai banking products/services/policies.

[JSixpack]

The only thing I would add is to watch out for the terms of the interest rate. Bangkok Bank have a deposit account that looks attractive at 3.25% but, written in Thai, this is only for six months after which it reverts to the basic 0.1%. There are other banks that offer slightly less but for the whole year. You will be taxed at source on the interest (7%).

Maybe you could point out the deposit account you are talking about on the Bangkok Bank web site which has excellent information in both Thai and English. The only deposit account I'm aware of by Bangkok Bank that will pay 3.25%pa is their current promotion on a 15 month fixed term saving account (which I signed up for last month...after by most recent 7 month fixed term account matured). The 15 month fixed account pays 3.25%pa for the entire 15 months...after it matures in 15 month if a person don't go in an roll it over to another deposit problem the account automatically rolls over in a 3 month fixed term currently paying 1.625%pa...typical of how most fixed account work.

Here's a link to the current Bangkok Bank promotion which includes the 15 month/3.25% and the associated rules in very clear English. But a person would need to open an account by 16 Oct...and that don't mean the account starts earning something less than 3.25% after 16 Oct, it just means that promotion won't be available no more. Come the end of the current promotion the bank will roll out new promotions for certain fixed terms...that's always the best time to get into certain fixed term deposits. Also here's a link showing all of the current Bangkok Bank deposits rates. Excluding the current/checking account, the lowest rate paid is 0.75% for the regular savings account.

You must be thinking the 7% VAT you pay for most products/services like buying something at Lotus; this is not applicable to bank accounts. The withholding tax for most fixed accounts is 15%.

The account I was referencing was on offer over a year ago and my bank branch did not have the English translated leaflet. When I spoke to a manager about this I was told that if I tried to close the account they would make me a better offer. Thanks for the tax info. Since we all pay tax why can't we have some of the benefits. Ooops! Sorry not this thread.

I hear you...it's usually hard to find much if any English language leaflets in most any Thai bank, even the ones in Bangkok. But the Bangkok Bank website, which is in both Thai and English, definitely has a lot of English language info/details on their products/services. Other Thai bank websites, even Kbank or SCB, don't even come in a close 2nd when it comes to the amount and level of English language banking info on the Bangkok Bank website. Heck, since most Thai banking products/services are very similar since all the Thai banks must follow Bank of Thailand regulations, Thai laws, etc.sthe Bangkok Bank website is a good place to get general info on Thai banking products/services/policies.

Google Translate is your friend.

[Pib]

Google Translate is your friend.

Google Translate is indeed a life saver sometimes...it's always running on my computer. Google Translate can indeed do a pretty far job of converting Thai to English many times depending on the subject; others times the translation leaves a lot of questions in your head and can get comical.

Plus, on the Bangkok Bank web site you don't need to use Google Translate as the English web pages are in clear English to start with....Google Translate don't even attempt to translate since it's already in English.

[Muhendis]

One year (and a bit) ago my goods and chattels were in transit and I was still setting up house. Internet was dial-up on my laptop. I was in the helpful hands of the customer service folks in my backwater branch of Bangkok Bank. They tried to be helpful but seemed to be mainly interested to get me to invest in their insurance product. I suspect commission hunting. Having said that there are some pretty attractive life insurance products out there if you don't mind tying up your money for 10 years or so....

[Naam]

But money invested in cash deposits - ANYWHERE in the world - is guaranteed to lose every single time because cash interest rates are always lower than inflation.

an incorrect generalising statement. if one locks long term in any high yielding asset (including cash) during a period of high inflation the results are excellent positive yields.

good examples are GBP and USD end 70s beginning 80s. those with long term fixed deposits and long Gilts or UST minted money.

Which is why I used the term cash deposits, Naam. You are talking about longer term deposits. I don't call that cash; cash is either immediately accessible or accessible in the short term.

Short term - 30-60 day - do not pay anywhere near inflation. And, yet, ironically, people thing this sort of saving vehicle is the safest of all

even a long term cash deposit is immediately available/accessible either by breaking the term and accept penalty interest or by using the deposit as collateral for a loan. those who locked in cash long term when interest rates were high could get a few years later a loan at a much lower rate than what their deposits yielded.

conclusion: my statement above remains valid.

your generalising statement does also not apply when investing in a high yield currency and converting the proceeds in another currency of choice. i can list dozens of cases and time frames where a HY currency did not depreciate in tandem with its domestic inflation rate but yielded exponentially more when converted and used in another currency.

i'm not an economist but a physicist who knows his maths. many rainy seasons ago, when i had no idea about investments but saved my first substantial amount of dough which yielded a meager 2-2.5% in Deutsch Marks i held (besides UK gilts) cash Sterling which yielded (overnight) 9.5% and raked in an additional bundle when Sterling appreciated >20% vs. my original marks a few years later.

getting "addicted" to this method i used interest rate differentials for ~30 (thirty!) years till in 2008 those differentials disappeared as far as major currencies were concerned.

[scobie redux]

I'm out of this discussion. I clearly was referring to short term cash deposits and savings rates (which many erroneously believe are the safest investments). Others are adding currency plays into the mix, which raises a whole different risk profile to the issue.

[kutjebu]

Bangkok bank 3 1/4% 15 months.

[Kimera]

Withholding tax is 15% deducted by the bank. Depending on your tax situation, you can get the 15% back when filing a tax return to the rev. dept. The following year.

Just to clarify, when saying "filing a tax return" I think most people would think they have to file a full blown Thai tax return; that's not the case for obtaining a refund of the 15% withholding tax which applies to fixed accounts. Just one specific, simple form with a copy of your passport, the withholding tax document from the bank, and a copy of your passbook is required....takes 2 to 6 weeks to get the refund via check or cash. Varies for tax office to tax office servicing your area as to how long it takes them to process the refund and whether they pay the refund via check or cash. On my last refund they paid cash and it took 6 weeks, but my tax office said they had some policy and equipment issues which slowed them down this year.

Just to clear up a point, if I am on a retirement visa with a fixed deposit account that tax has been taken from, then I can fill in a tax form and have the tax money returned, no work permit, no nothing..

Yeap...yeap...you'll get a refund...no work permit required. I'm on a retirement visa/extension of stay with fixed deposit account.

Thanks ..do I get the tax refund form from the bank or the local tax office..

[meatboy]

all the info you need for claiming tax withheld is in the bank savings interest rates forum just scroll back from the last post ,its all there.

[Pib]

Thanks ..do I get the tax refund form from the bank or the local tax office..

Get the tax form from your local tax office. Get the tax letter from your bank. The tax letter from your bank is a very short form type letter on the bank's letterhead with signature that confirms X-amount of tax was withheld...that amount will match what is shown in your passbook. You attach that letter and copy of your passbook to the tax form. I expect your local tax office will gladly help you fill out the form as long as you go in with some puppy dog eyes like I do.

[Kimera]

Thanks ..do I get the tax refund form from the bank or the local tax office..

Get the tax form from your local tax office. Get the tax letter from your bank. The tax letter from your bank is a very short form type letter on the bank's letterhead with signature that confirms X-amount of tax was withheld...that amount will match what is shown in your passbook. You attach that letter and copy of your passbook to the tax form. I expect your local tax office will gladly help you fill out the form as long as you go in with some puppy dog eyes like I do.

Thanks for the reply that covers it all..