Are you concerned that your funds might be lost?

[stoli]

Hi. Call me paranoid but leaving funds in Thailand bank for retirement visa worries me. Do you worry that the market there in Thailand might crash and your funds might be lost?

Do I have anything to worry about leaving 800,000 bht in a Thai bank? What is the worst case scenario?

I know most xpats have no choice but to take this route.

If you're getting a "retirement visa" in your home country, there's no need for Baht 800,000 in a Thai bank although you'll need to prove that you have financial resources.

When you get around to applying for an extension of stay based on retirement, then you'll need either the money in the bank or proof of Baht 65,000 a month in income or a combination.

So most expats do have a choice, including the choice to not come to Thailand and fret over whether or not the nasty foreign banks will steal all their money. Actually I've kept money in Thai banks for about 15 years and guess what !!! none of it was lost !!! During that time a lot of banks in the US and Europe collapsed or had limitations on withdrawals or threatened to tax foreign deposits and also money in investments evaporated or was stolen by people like Bernie Madoff or "Sir" Allan Stanford or Lehman Brothers or ... well the list is endless ... but none of them were Thai.

It's Baht 800,000. You're going to spend it pretty quickly anyway and if you are going to spend all your time worrying about it, wouldn't it be better to find a nice bed-sit back in farangland where you can sit clipping supermarket coupons to wile away the golden years rather than being in Thailand in the midst of a bunch of foreigners?

Seriously, if this is your first time away from home and you feel your little bit of cash is unsafe here amongst the conniving locals, and you haven't even managed to figure out the difference between the requirements for an extension of stay versus the mythical retirement visa, you're probably going to be miserable here anyway ... and Heaven knows we already have enough people on TV whining about all sorts of imagined inconveniences in their sordid lives, including worrying about what happens to their loose change after they die. Really, why bother?

If it would make you feel better, keep your money in Europe. What could go wrong?

You never lost money in an American bank because of Bernie Madoff There are a lot of reasons to be glad he went to prison, but this is not one of them.

[elzach]

OP, that's a good question, I wouldn't worry about the safety of the 800K baht.

But I would worry about the following two factors that are often overlooked by expats:

* foreign exchange risk and

* local inflation.

Example: Say exactly a year ago you exchanged USD to get your 800K baht. At the rate of USD/Bht a year ago, that would have been $27,304. Now a year later, your 800K in baht is worth $24,560. That's about 10% down. Of course it all depends on the timeframe. If you exchanged two years ago, your investment would be down 6.5%. If 5 years ago, you're up about 7%.

Also, inflation. The official rate of inflation by the Bank of Thailand, over the past 2 years, is 2%-3.5%. Half of that CPI weight is given to food and transportation. housing is another 23%. Discretionary items (ie. recreation, and a favorite with expats) is only a 5% weight. The point is the "real" inflation is much higher, safe to say 5%-10% a year, or even more. Now take that inflation rate and calculate it on a cumulative basis for as long as your 800K baht is sitting at the bank. If for 2 years, and at a modest 7% inflation, your 800K baht is now worth 690,000 baht. Nice eh?

Now, find a local bank that will pay 6%-10% interest rate on that 800K deposit, and please come back to report

edit: the above factors affect any investment, including buying a house for example.

Edited March 26, 2014 by elzach

[Maggusoil]

And after the extension is granted, the money can be used up during the next 9 months, then a "refill" from abroad (if you prefer).

Generally it is also possible to convert/send back the money (if you have proof of transfer from abroad).

Yes, I do worry somewhat about the economical future of Thailand.

Big crash of the Baht? Not likely if civil war can be avoided.

Don't forget that if you dont have a Thai will& anything happens then the Thais keep whatever is in their banks in your name. It dont matter if you have a will in your own country. Personally think that is really the reason for this rule on long term stay visa's & extentions

If you have some funds of reasonable substance, don't put your eggs in one basket. Have a bit in INdo, Thailand and Australia, transfer them around a

bit as the exgchange rates change. Citibank in Australia are now fee free and free accounts. All fees gone. Going to open one tomorrow.

[nong38]

As a slight deviation to this topic I will this year bring over my spending for the forthcoming year in one lump sum, the rate is looking pretty good at the moment so its looks iike the right move, remembering not so long ago it was around 43 to GBP.

Now the question is this, the UK economy is picking up but with exchange rate as it is is this the time bring more funds in as well as my living expenses?

[chang beer]

OP, that's a good question, I wouldn't worry about the safety of the 800K baht.

But I would worry about the following two factors that are often overlooked by expats:

* foreign exchange risk and

* local inflation.

Example: Say exactly a year ago you exchanged USD to get your 800K baht. At the rate of USD/Bht a year ago, that would have been $27,304. Now a year later, your 800K in baht is worth $24,560. That's about 10% down. Of course it all depends on the timeframe. If you exchanged two years ago, your investment would be down 6.5%. If 5 years ago, you're up about 7%.

Also, inflation. The official rate of inflation by the Bank of Thailand, over the past 2 years, is 2%-3.5%. Half of that CPI weight is given to food and transportation. housing is another 23%. Discretionary items (ie. recreation, and a favorite with expats) is only a 5% weight. The point is the "real" inflation is much higher, safe to say 5%-10% a year, or even more. Now take that inflation rate and calculate it on a cumulative basis for as long as your 800K baht is sitting at the bank. If for 2 years, and at a modest 7% inflation, your 800K baht is now worth 690,000 baht. Nice eh?

Now, find a local bank that will pay 6%-10% interest rate on that 800K deposit, and please come back to report

edit: the above factors affect any investment, including buying a house for example.

thank you Zach

BEER

Edited by elzach, Today, 06:38 .

[MAJIC]

Why ask? you must know the answer? in this Country,in these troubled times,losing your Bank balance is the least of the worries,ship your finances back home! and make Emergency plans for the family. IF and WHEN!

[dennisrobertpell]

No Northern Rock depositor lost any money from their account.

Millions of tax payers did.......

[mmh8]

to the op i did try telling my bank that my funds were lost. they told me that having spent it there was not a lot they could do for me

[chiang mai]

OP, that's a good question, I wouldn't worry about the safety of the 800K baht.

But I would worry about the following two factors that are often overlooked by expats:

* foreign exchange risk and

* local inflation.

Example: Say exactly a year ago you exchanged USD to get your 800K baht. At the rate of USD/Bht a year ago, that would have been $27,304. Now a year later, your 800K in baht is worth $24,560. That's about 10% down. Of course it all depends on the timeframe. If you exchanged two years ago, your investment would be down 6.5%. If 5 years ago, you're up about 7%.

Also, inflation. The official rate of inflation by the Bank of Thailand, over the past 2 years, is 2%-3.5%. Half of that CPI weight is given to food and transportation. housing is another 23%. Discretionary items (ie. recreation, and a favorite with expats) is only a 5% weight. The point is the "real" inflation is much higher, safe to say 5%-10% a year, or even more. Now take that inflation rate and calculate it on a cumulative basis for as long as your 800K baht is sitting at the bank. If for 2 years, and at a modest 7% inflation, your 800K baht is now worth 690,000 baht. Nice eh?

Now, find a local bank that will pay 6%-10% interest rate on that 800K deposit, and please come back to report

edit: the above factors affect any investment, including buying a house for example.

thank you Zach

BEER

Edited by elzach, Today, 06:38 .

The biggest threat that expats face is in not deciding which is their home currency, it's all well and good being a nostalgic Brit or an American (for example) and having a deep seated affection for Pounds or Dollars. But when you live in Thailand and you spend Thai Baht, accumulating Dollars and Pounds can work against you, ask any expat who has lived here since 2006 and seen the value of their foreign currency holdings plummet and today can only dream of 70 baht to the Pound and 40 baht to the Dollar. Of course those who refuse to see Thailand as anything but a third world country and the financial system here as unsafe, will always get it wrong on this point!

[larsjohnsson]

I've been told by some friends who have retirement visas that you can get a lawyer to deposit the money and then immediately withdraw it so it's only in your Thai bank account for 24 hours.

Never done it myself but might be worth you making further enquiries.

some friends told you

Some friends told me that you cheat

[infinity11]

No Northern Rock depositor lost any money from their account.

Times they are a-changing. The EU is committed to adopting the dreaded Cyprus bail-in tactic, which means that from the end of August 1916 depositors' accounts of members states can be raided to help out a bankrupt bank.And if it still goes to the wall, depositors will be deemed creditors, with no preferential rights, and have to wait in line (possibly for years) to get anything at all back.

Faith in the Thai banking system should be tempered by the reality that three commercial banks went belly up during the 1997 run on the baht - and the fact that they are phasing out what used to be a reasonably generous compensation scheme for depositors in banks which went bust. In a year or so you will be entitled to now't, however much you may have deposited.

Just can't win, can we!

Never mind, there's always Thai gold. And real estate. Or, alternatively, telling your Thai wife or partner that the ATM is no longer working and she or he had better start looking for a job!

Which three commercial banks failed and why and how did the others that did not fail hold up, did they feel the pain?

[infinity11]

Good question!

Why they require the 800,000 as one option raises some good points and i often wonder myself what MIGHT happen to this money under different possible circumstances.

The safety of any bank, many many others all over the world, is a current and huge big concern.

From the little i know it's a house of cards.

I do get better interest here and thai currency seems to go further and hold its buying power and value better than the dollar IMHO despite the huge discrepancies in the exchange rates over time.

Also there is the reporting your deposit in Thailand to the USA.

Has anyone lost money or been penalized for NOT doing so YET?

How real of a threat is it to ignore this reporting requirement?

Most all of these questions and concerns we simply can not be SURE of but whomever said spread your risk around makes a lot of sense if you have the time and patience and dont mind loosing a bit here and there on fees and exchange rate fluctuations.

[TinoThailand]

I would not be more worried here then with an USA or EU bank. Bank holidays, Cypress style "haircuts". Germany or France will crash probably sooner and those are a bit to big for the EU obsession. Buy your Baht cheap before it's to late... Never bet on 1 horse anyway they say.

[TallGuyJohninBKK]

The simple answer to the OP's question is:

Any amount of funds you're likely to deposit in a regular Thai bank is ensured against the financial failure of the bank by the Thai government's Deposit Protection Agency.

http://www.dpa.or.th/main.php?filename=index___EN

This entity was created after the Asian financial meltdown, and AFAIK, it hasn't had to actually payout for a bank failure since its creation. So there's not much of a track record there. But the law is in place and it would cover deposits held by farangs, should a bank fail. However, under the DPA's policies, it very likely could take up to a couple months for any depositor in such a situation to get their funds reimbursed.

However, you should note, the DPA doesn't provide any protection against bank fraud or theft. So, if you're going to keep any sizeable amount of money in a Thai bank, best to keep it in an deposit account that doesn't have an associated ATM/debit card. Also, set a low-limit for any external transfers via online banking, and if the bank offers it, sign up for SMS or email alerts of any account activity. That way, you minimize the potential for fraud and theft.

[SheungWan]

The simple answer to the OP's question is:

Any amount of funds you're likely to deposit in a regular Thai bank is ensured against the financial failure of the bank by the Thai government's Deposit Protection Agency.

http://www.dpa.or.th/main.php?filename=index___EN

This entity was created after the Asian financial meltdown, and AFAIK, it hasn't had to actually payout for a bank failure since its creation. So there's not much of a track record there. But the law is in place and it would cover deposits held by farangs, should a bank fail. However, under the DPA's policies, it very likely could take up to a couple months for any depositor in such a situation to get their funds reimbursed.

However, you should note, the DPA doesn't provide any protection against bank fraud or theft. So, if you're going to keep any sizeable amount of money in a Thai bank, best to keep it in an deposit account that doesn't have an associated ATM/debit card. Also, set a low-limit for any external transfers via online banking, and if the bank offers it, sign up for SMS or email alerts of any account activity. That way, you minimize the potential for fraud and theft.

I would regard any Thai guarantee as not worth the paper it was printed on and as likely to pay out as the rice repayment scheme has during recent months.

[larsjohnsson]

Get the visa in your home country if worry about losing the money here in Thailand. Then you can have the money in a bank in your home country also

[SheungWan]

No Northern Rock depositor lost any money from their account.

Millions of tax payers did.......

As an individual you will have hardly noticed since as an individual tax payer you did not have a personal bank account with Northern Rock. in fact it is the hardly noticed factor which was the biggest gain since the government action of the day stopped the threat of any greater run on the UK banking system. The action in fact produced a net gain on what might have been we can strongly argue and therefore a net gain to the State coffers. A net positive investment.