I have a Thai friend who was explaining to me that the savings account rate at the Thai Government Savings bank is like 2% annually. Is this correct? Is this inflation adjusted or am I missing some benefit?

2% is well below thailand's inflation rate, and I just hate to see her earned money disappearing. Does anyone have any other recommendations? Would a savings account at Bangkok Bangk be better?

It's all about the same. For many folks, it's not a question of 'beating inflation' as if they don't save at 2%, they spend it... so they are actually in the "negative" in a much worse fashion against inflation.

p.s. your friend may be referring to the Government Savings Bank "lottery" bonds ('salak omsin'). They pay 2% and you get put in a monthly drawing every months for 3 years (the term of the coupon or ticket depending how you look at it) with just as bad of odds as a real lottery, where you can win anywhere between nothing and 15 million Baht. Penalties apply if just like any fixed account if you close the account before the term expires.

Edited May 25, 200620 yr by Heng

I walked past an Omsin Bank yesterday and they had a banner advertising rates up to 5.35%

Normal passbook savings account here do not earn much interest - currently under 1% - as they are what in most countries would be regarded as a current account (checking) but without any checks. If you have an amount already saved it would be wise if you used that to open a fixed deposit account which now pay about 4.5% at most banks. Believe most of these accounts also let you add funds are any time without opening a new account, but date will be the same number of months but from that deposit time.

Does anyone know of any inflation adjusted THB denominated low-risk savings options?

--matt