Is this a scam at Phuket arrivals?

[prepress]

I have accounts with Bangkok Bank and Krungsri.

My fixed deposits have matured, and I don't want to renew with low interest rates. They offered me tax free Mutual fund.

Krungsri Bank calls it '6M90 Fund' for 6 month, 2.95%

Bangkok Bank calls it 'B-Fixterm 15/14', 6 month, 2.85%

The risk of Mutual Funds is level-4. What is your opinion? How safe is it to invest in mutual funds in Thailand?

[SheungWan]

Asking whether something is safe is not a binary question yes/no. It is a calibration of risk when it comes to financial investments and those who want higher returns need to understand that higher returns = higher risk. So the correct answer is riskier.

[prepress]

Asking whether something is safe is not a binary question yes/no. It is a calibration of risk when it comes to financial investments and those who want higher returns need to understand that higher returns = higher risk. So the correct answer is riskier.

Thank you. What I meant with my question was - did anybody had some bad experience with Thai Mutual funds?

And the 2nd question: If they say 2.95% in 6 month, will it stay by 2.95% or can it drop?

[SheungWan]

Asking whether something is safe is not a binary question yes/no. It is a calibration of risk when it comes to financial investments and those who want higher returns need to understand that higher returns = higher risk. So the correct answer is riskier.

Thank you. What I meant with my question was - did anybody had some bad experience with Thai Mutual funds?

And the 2nd question: If they say 2.95% in 6 month, will it stay by 2.95% or can it drop?

You have to read the small-print conditions, but your common sense should be telling you that this rate is a projected rate and not a guaranteed rate.

[AyG]

These funds invest in a range of bonds. The money you get back at maturity is a combination of the coupon (interest) paid by the bonds and the value of the bonds (minus fees). The value of the bonds will change according to prevailing interest rates. If interest rates rise, then the value of bonds will fall. Not only are the interest rates not guaranteed, you may not even get back the money you put in.

There are other risks, such as one of the bond issuers defaulting on coupon payment, but that's unlikely.

(In my opinion, interest rates in Thailand will start to rise once the current political situation begins to resolve itself.)

In other words, these funds are rather more risky than bank deposits and come with no guarantees.

[TallGuyJohninBKK]

Just in case, folks should be aware that mutual fund holdings placed thru a Thai bank will not qualify for Thai Immigration's bank deposits requirement associated with extensions of stay based on marriage or retirement.

Savings accounts will, and fixed deposit accounts usually will, depending on the Immigration office involved. But mutual funds, bonds, etc won't -- even if purchased through a Thai bank.

Also be aware that just for Americans, there are potentially complicated reporting and tax issues associated with holding foreign stock market investments these days.

Edited April 9, 2014 by TallGuyJohninBKK

[SantiSuk]

Needs a financial adviser or someone with lots of investing experience to read the documentation for you and maybe ask questions to the bank. English language translations are likely to be summaries and may be deficient. The Thai language t&cs will always previal in a Thai domiciled investment product.

All other avenues are spit in the wind, unless someone here has invested in the exact same product/same maturity and has done the same as above.

Stick to bank accounts unless you are experienced or appropriately advised. if you want a punt on something no harm in trying with a small portion of your wealth (no more than 5% to start) - we all have to start somewhere.

[40 year private investor]

[AyG]

All other avenues are spit in the wind, unless someone here has invested in the exact same product/same maturity and has done the same as above.

Same product/same maturity means nothing for a bond fund. History seldom repeats itself.

[prepress]

Thanks everyone. That's the info I need to make my decision. Unfortunately, my Thai friends don't know anything about it. And the bank lady gave me wrong information: "The rate will not change during the 6 month."

TallGuyJohninBKK: I not use it for immigration.

H.A.

Edited April 9, 2014 by prepress