Bangkok Bank fixed accounts - how do they work?

[AbeSurd]

A friend of mine has a Bangkok Bank fixed account and seems to use it like I would a Bangkok Bank savings account. In other words he keeps the account open year after year. And he puts money into the account when he needs to, and takes money out of it when he needs to.

Despite having had several fixed accounts over the years myself, I didn't realise fixed accounts could be used in this way. I thought, for example, that you put in a fixed amount when you opened the account and that you couldn't then put any additional money in.

Anyone on ThaiVisa know how these fixed accounts work?

Thanks.

[meatboy]

its a savings acc.not the same as a fixed deposit.more than likely its a minimum/maximum deposit every month for a period of time.it will be one of them with a fancy,hard to pronounce acc.normally these accs.are tax free if you qualify for one.

[meatboy]

its a savings acc.not the same as a fixed deposit.more than likely its a minimum/maximum deposit every month for a period of time.it will be one of them with a fancy,hard to pronounce acc.normally these accs.are tax free if you qualify for one.

it will be SINMATHAYA SUBTHAWEE fixed savings monthly term 2yrs.-5yrs.

if you go to the bank interest forum,page 52 post1281 you can read my experience trying to open similar at L.H.bank.

[Pib]

A traditional Thai bank "fixed account" comes with a set interest rate for a selected time period...say 3% over a 12 month maturity period just for example.  If money is withdrawn before that maturity period is reached the bulk of interest earned is loss.  Instead of earning the 3% it reverts to the "standard" saving account interest which is only around 0.5%.   And I don't mean you start earning the 0.5% from that day, I mean that 0.5% reverts back to the day  you opened the fixed account which means you've loss the bulk of the interest.   A withdrawal from a standard savings account (like the kind that comes with a debit card, etc) doesn't result in any loss of interest since there is no maturity period...interest is usually paid twice a year usually in June and December.

 

And in a fixed account if the money is drawn out within the first 3 months "no/zero/zippo" interest is paid.  After the fixed account matures (i.e.., after 12 months in this example but fixed accounts come in various maturity periods...3, 6, 7, 24, 36 months, etc) any additional deposits only earn the 3 month fixed account interest rate which is usually just a little better than the interest rate for a standard savings account.  But remember, if a person makes a withdrawal say every month or three, he's invoking one of the interest penalty provisions and not earning any interest.   And a traditional fixed account usually requires a certain "minimum" amount for any additional deposits...say Bt100K to Bt200K...and must be made within the promotional period for that account which may only last a few months or even few weeks....after the promotional period additional deposits only earn the regular savings account interest rate.

 

Take a look at this Bangkok Bank webpage which explains the rules for one of their current traditional "fixed account" products.   The details on the page are clear and precise; can't say the same for other Thai bank websites regarding their fixed savings account products.

 

Now there are hybrid "fixed accounts" where you can make X-amount of withdrawals per month and come with different interest loss penalty provisions and varying interest rates...some require you to make a minimum amount deposit per month in order to earn the higher interest which will probably be some where between that of a regular savings account and a traditional fixed account.   Seems some Thai banks like to work the "fixed" word into the name of their special/hybrid savings accounts since the "fixed" word relating to savings accounts implies a significantly higher interest rate...just be triple sure you understand the deposit and withdrawal requirements/penalties of these hybrid fixed accounts.

 

Traditional fixed account also come with a 15% withholding tax on "any" amount of interest earned...it don't have to exceed the Bt20K in interest which is referred to as a tax trigger- level in other types of savings accounts.  You can get this 15% withholding tax easily refunded by applying for the refund during Jan-Mar at your local tax revenue office....you can even apply for 3 years back worth of with holdings.   Other threads address how to apply for the refund...it's easy and a refund usually takes 2 to 6 weeks.

 

"Fixed" savings accounts are good products to earn much higher interest than a regular savings account, but very specific withdrawal, deposit, and interest penalty rules apply.  Be sure  you understand them or you may just be allowing your bank to pay you the regular savings account interest rate or less because you are unknowingly violating some of the fixed account rules.   So many different types of fixed accounts (and associated rules) offered by Thai banks.

Edited August 13, 2014 by Pib

[AbeSurd]

its a savings acc.not the same as a fixed deposit.more than likely its a minimum/maximum deposit every month for a period of time.it will be one of them with a fancy,hard to pronounce acc.normally these accs.are tax free if you qualify for one.

 

Thanks - but, no, I don't think so. I've seen the passbook for my friend's Bangkok Bank account. It's the usual orange passbook they have, with 'Fixed account' printed on the cover.

 

The passbook for a Bangkok Bank savings account is different - the cover is usually blue front and back. Or with a blue back and a white front with red and bue flag pattern. (That's what I have anyway).

 

On my friend's account it looked like interest (tax deducted) was credited quarterly (every three months). Although I'm not sure whether or not he receives interest in a quarter when he withdraws money.
 

[worgeordie]

 

its a savings acc.not the same as a fixed deposit.more than likely its a minimum/maximum deposit every month for a period of time.it will be one of them with a fancy,hard to pronounce acc.normally these accs.are tax free if you qualify for one.

 

Thanks - but, no, I don't think so. I've seen the passbook for my friend's Bangkok Bank account. It's the usual orange passbook they have, with 'Fixed account' printed on the cover.

 

The passbook for a Bangkok Bank savings account is different - the cover is usually blue front and back. Or with a blue back and a white front with red and bue flag pattern. (That's what I have anyway).

 

On my friend's account it looked like interest (tax deducted) was credited quarterly (every three months). Although I'm not sure whether or not he receives interest in a quarter when he withdraws money.
 

 

It cannot be a fixed account, because a fixed account means a certain amount of money is FIXED for 3,6,12 months or longer,

at a FIXED interest rate,if you try and take any money out before the maturity of the account you will loose most of your interest.

so if your friend is taking money out when he feels like it,its NOT a fixed account.

regards Worgeordie

[AbeSurd]

A traditional Thai bank "fixed account" comes with a set interest rate for a selected time period...say 3% over a 12 month maturity period just for example.  If money is withdrawn before that maturity period is reached the bulk of interest earned is loss.  Instead of earning the 3% it reverts to the "standard" saving account interest which is only around 0.5%.   And I don't mean you start earning the 0.5% from that day, I mean that 0.5% reverts back to the day  you opened the fixed account which means you've loss the bulk of the interest.   A withdrawal from a standard savings account (like the kind that comes with a debit card, etc) doesn't result in any loss of interest since there is no maturity period...interest is usually paid twice a year usually in June and December.

 

And in a fixed account if the money is drawn out within the first 3 months "no/zero/zippo" interest is paid.  After the fixed account matures (i.e.., after 12 months in this example but fixed accounts come in various maturity periods...3, 6, 7, 24, 36 months, etc) any additional deposits only earn the 3 month fixed account interest rate which is usually just a little better than the interest rate for a standard savings account.  But remember, if a person makes a withdrawal say every month or three, he's invoking one of the interest penalty provisions and not earning any interest.   And a traditional fixed account usually requires a certain "minimum" amount for any additional deposits...say Bt100K to Bt200K...and must be made within the promotional period for that account which may only last a few months or even few weeks....after the promotional period additional deposits only earn the regular savings account interest rate.

 

Take a look at this Bangkok Bank webpage which explains the rules for one of their current traditional "fixed account" products.   The details on the page are clear and precise; can't say the same for other Thai bank websites regarding their fixed savings account products.

 

Now there are hybrid "fixed accounts" where you can make X-amount of withdrawals per month and come with different interest loss penalty provisions and varying interest rates...some require you to make a minimum amount deposit per month in order to earn the higher interest which will probably be some where between that of a regular savings account and a traditional fixed account.   Seems some Thai banks like to work the "fixed" word into the name of their special/hybrid savings accounts since the "fixed" word relating to savings accounts implies a significantly higher interest rate...just be triple sure you understand the deposit and withdrawal requirements/penalties of these hybrid fixed accounts.

 

Traditional fixed account also come with a 15% withholding tax on "any" amount of interest earned...it don't have to exceed the Bt20K in interest which is referred to as a tax trigger- level in other types of savings accounts.  You can get this 15% withholding tax easily refunded by applying for the refund during Jan-Mar at your local tax revenue office....you can even apply for 3 years back worth of with holdings.   Other threads address how to apply for the refund...it's easy and a refund usually takes 2 to 6 weeks.

 

"Fixed" savings accounts are good products to earn much higher interest than a regular savings account, but very specific withdrawal, deposit, and interest penalty rules apply.  Be sure  you understand them or you may just be allowing your bank to pay you the regular savings account interest rate or less because you are unknowingly violating some of the fixed account rules.   So many different types of fixed accounts (and associated rules) offered by Thai banks.

 

Thank you. Your post and the link are very informative. I notice on the link it says:

 

"The minimum opening amount and the amount of any subsequent deposits for the 4-Month Fixed Deposit Account is 200,000Bt."

 

Which strongly suggests you can put additional money into the account after openng. But it doesn't say if you're able to do that for the entire period up to maturity. With the fixed account I just opened today with Siam Commercial I can only add additional money before August 31st.

 

[Don Aleman]

I HAVE USED FIXED ACCOUNTS FOR 25 YEARS IN SEVERAL COUNTRIES AND NEVER HEARD OF MAKING LATER

DEPOSITS AFTER ORIGINALLY OPENING ONE AS MOST HAVE AN OPENING RATE EXPIRATION. OFTEN, HERE, CALLED END OF PROMOTION DATE. MOST Thai ACCOUNTS ARE BASED ON NUMBER OF MONTHS OR YEARS YOU WISH OR, IS OFFERED ,WITH THE INTEREST RATE  THE HIGHEST FOR THE LONGEST TERM. EVERY ONE I OPENED ALLOWED WITHDRAWALS, SOME LIMITED BY WHEN AND HOW MUCH. THE AMOUNT WITHDRAWN GETS THE NORMAL SAVINGS RATE NOT THE HIGHER FIXED DEPOSIT RATE. THE REMAINDER DOES GET THE HIGHER RATE

[Kabula]

They work fine unless the top Executive doesn't steal your savings.

That happened at the Bangkok Bank of Commerce.

Check out the news article below.

http://in.reuters.com/article/2012/06/08/thailand-banker-idINDEE85705S20120608

Remember, if you can't touch it you don't own it!

Also, when you make a withdrawal, the tax is deducted.

Are you sure you want the risk for a measly interest rate? Edited August 13, 2014 by Kabula

[Tawai]

Traditional fixed account also come with a 15% withholding tax on "any" amount of interest earned...it don't have to exceed the Bt20K in interest which is referred to as a tax trigger- level in other types of savings accounts.  You can get this 15% withholding tax easily refunded by applying for the refund during Jan-Mar at your local tax revenue office....you can even apply for 3 years back worth of with holdings.   Other threads address how to apply for the refund...it's easy and a refund usually takes 2 to 6 weeks.

 

Hi PIB !

Thanks so much for your info .

This excellent news to us.

Could you please elaborate where to apply for the refund ? Is that at the tax office were we pay our monthly (salaries) and yearly (profit from business) taxes, or at the bank (with the for "Hak na tee chai" form) ?

[Pib]

 

Thank you. Your post and the link are very informative. I notice on the link it says:

 

"The minimum opening amount and the amount of any subsequent deposits for the 4-Month Fixed Deposit Account is 200,000Bt."

 

Which strongly suggests you can put additional money into the account after openng. But it doesn't say if you're able to do that for the entire period up to maturity. With the fixed account I just opened today with Siam Commercial I can only add additional money before August 31st.
 

That's where reading the fine print, note codes comes in.   Some fixed accounts at XYZ interest are open for deposits up to a certain cutoff date...not uncommon to see such promotional periods to last only a few weeks or months especially if its a really good interest rate.  After that promotional period/cutoff date any addtional deposits won't be accepted or will be a the standard rate versus the promotional rate.  Say they were having a promotional 12 month fixed account at an interest level of 4% with the promotional period ending 31 Aug 14...any additional deposits made through that promotional period up to 31 Aug would get the 4%; any deposits after that date may not be accepted or accept at a lower/standard rate for 12 months...like maybe 2%.  

 

Other times there may not be a promotional cutoff date...it's open ended "until the bank decides to stop the promotion" which they could decide to do at any time.   Any additional deposits would earn the promotional rate up until the bank stops taking any more deposits at that interest rate.

 

Yeap, always be sure to look for any promotional cutoff date for additional deposits to earn the higher interest rate.

[Pib]

Traditional fixed account also come with a 15% withholding tax on "any" amount of interest earned...it don't have to exceed the Bt20K in interest which is referred to as a tax trigger- level in other types of savings accounts.  You can get this 15% withholding tax easily refunded by applying for the refund during Jan-Mar at your local tax revenue office....you can even apply for 3 years back worth of with holdings.   Other threads address how to apply for the refund...it's easy and a refund usually takes 2 to 6 weeks.

 

Hi PIB !

Thanks so much for your info .

This excellent news to us.

Could you please elaborate where to apply for the refund ? Is that at the tax office were we pay our monthly (salaries) and yearly (profit from business) taxes, or at the bank (with the for "Hak na tee chai" form) ?

 

This earlier thread on bank interest withholding tax refunds should provide the info you ask for.    Link.

 

And yes, you want to deal with the tax office dealing with personal income tax; not the office that deals with business/misc/VAT taxes.  Your bank will only be involved in providing you the tax letter you need to submit with your refund request.    But if you are working/paying taxes in Thailand, then you would just work the interest income and withholding into your annual tax return as above thread really focuses towards someone not earning any Thai income like from a job in Thailand...the only source of income "from within Thailand" is the savings account interest.    See above link for more info.

Edited August 13, 2014 by Pib

[Kerryd]

I have 4 types of accounts with Bangkok Bank (Savings, Fixed Deposit Account, Fixed Income-Term Fund and a Thanatavee Fixed Income Fund). The last 2 appear to be Mutual Fund based accounts (where you purchase units at a certain value and hope they appreciate over the term of the investment). 

 

The Savings Account earns squat for interest of course (about 1.125%/annum I think).

 

The Fixed Deposit Account is set to either a return of 2% for the 4 month term, or 2.8% for an 11 month term. Note that it is 2% (or 2.8) per annum, not per deposit term. That means for example, that if you deposit 1 million baht for 4 months (at 2%) you will only earn 6,684.93 baht, minus 15% tax leaving you with 5,682.19 (at least that's how it worked 2 days ago). (This works out to a whopping 1,420 baht a month per million deposited.)

If you'd put that same mil in for the 11 month (2.8%) term, at the end you would have probably received about 21,816 baht after taxes which works out to a little under 2,000 baht/month.

 

After the term length is finished, the account reverts to a standard (1.125%) interest rate. If you take funds out of the account before the term is up, you lose the interest (and the rate would drop to the standard rate). (Note - the 2%/4 month and 2.8%/11 month deal expires on 29 August. No idea what kind of deals they'll offer after that date.)

 

The Bualuang Fixed Income-Term Fund is set to varying term lengths. My current account is set to a 6 month term at 2.85% interest (per annum), so after that term is up I should get about 1.425% (minus the 15% tax of course) paid into the account. I'm not sure if that rolls over into a regular (low interest) savings account after that, or if it automatically renews for another 6 month term. I should probably look into that one day.

 

The 4th account type I have is called a Bualuang Fixed Income Fund. I was looking for something I could transfer money into from my low interest savings account (where my pay is deposited) that would have a better return rate.

It looks like a Mutual Fund based investment as well where I've purchased a number of units at the "Buy Price" (BP) and over the last few months the "Net Asset Value" (NAV) has increased a wee bit. Looking at the numbers, it's slightly better than the 2% I got from the Fixed Deposit (2%) account over the same time frame. My understanding is that I can add more to that fund (or withdraw from it) without penalty. It's called a "fixed income" fund, but I don't have a set rate of return or a term length. Just have to hope that the value of the Fund continues to increase.

 

None of these accounts give great returns. If you can deposit enough money into these types of accounts that you can live off the interest, then you are probably rich enough to not need the interest anyways !

 

Personally I was just looking for something a little better that the standard (1.125%) rate to stash the cash I don't need currently. Having the Fixed Term account also keeps that nest egg locked away and readily available for things like "extension of stay" letters once a year. However, the "lock" isn't strong enough to prevent you from getting at the cash if needed for an emergency (as you'd only lose the few thousand baht of interest for that term).

 

The Thai Banking system could use a massive updating. Having to close out a Fixed Deposit account, then open a new one just so I can re-invest the same money I already had in there ? And the amount of paperwork you have to go through every time ! Bangkok Bank has more copies of my passport on file than Thai Immigration ! I've got a stack of old pass books that basically have 3 lines in them (initial deposit, interest deposited, funds withdrawn) because they have to open brand new accounts each time. 

(It was kind of funny when I was in there today though. Listening to a German guy and his Thai wife arguing with each other in German, and then both talking to the Accounts clerk in (broken) English, then the wife and the clerk having a short convo in Thai which ended with nothing being done by anyone ! (I think the guy didn't know there was a 20k daily withdrawal limit on his ATM card or something - he couldn't figure out why it wouldn't let him take more money out of his account when he had sufficient balance to do so.)

 

Bangkok Bank also started offering the ability to do "wire transfers" through their internet banking, but apparently there's a catch. You can only do it if you are working in Thailand and can provide income and tax statements to prove where the money came from ! So if you are working overseas and having your pay sent to your Thai account, you can't wire transfer it back out using the internet ! (Still easy enough to do at the bank branch, assuming you are in Thailand at the time of course.)

 

 

[Pib]

 

The Savings Account earns squat for interest of course (about 1.125%/annum I think).

A year or two ago it did, but as Bank of Thailand lowered its rates the commercial banks like Bangkok Bank, K-Bank, SCB, all the Thai banks, lowered their interest rates on all types of savings accounts.  A regular savings account now earns only 0.50% at most banks...maybe 0.625% at some.  I checked the Bangkok Bank webpage a minute ago to confirm their 0.5% rate for regular savings accounts.

[TallGuyJohninBKK]

There's an ongoing thread here with posts on some of the better Thai bank account deals in terms of interest rates, which of course are changing all the time due to promotions and rate changes and such. Go to the end of the thread, and then start working your way back, in terms of the current/latest offerings.

 

http://www.thaivisa.com/forum/topic/560837-bank-savings-interest-rates/

[jacky54]

I HAVE USED FIXED ACCOUNTS FOR 25 YEARS IN SEVERAL COUNTRIES AND NEVER HEARD OF MAKING LATER

DEPOSITS AFTER ORIGINALLY OPENING ONE

 

 

I did at Tanachart, first they said no then I said ok I will close the account put the amounts of money together then open another one straight away, they said OK you can put money in the 6 month fixed then. Saved them self work

[ableguy]

Try asking the bank , another dumb waste of space post.

[meatboy]

kerryd. quote.the thai banking system needs a massive updating.

starting with most of the staff.

[Pib]

kerryd. quote.the thai banking system needs a massive updating.

starting with most of the staff.

Ah, the staff is fine...it's just the banking laws, rules and policies they operate under....those laws/rules/polices is what needs updating....I'm not holding my breath.

[hugh2121]

I think it may be similar to the Krung Sri "Mee Tae Dai" account. For balance under 100,000 interest is 0.5%. Balance over 100,000 interest is 2.3% calculated daily and credited monthly. 2 free withdrawals per month. More than 2 withdrawals 50 baht per withdrawal. I transfer money twice a month into ordinary savings account and use Atm. Easy! Go to krungsri.com look at deposit under deposit accounts.

[jacko45k]

 

its a savings acc.not the same as a fixed deposit.more than likely its a minimum/maximum deposit every month for a period of time.it will be one of them with a fancy,hard to pronounce acc.normally these accs.are tax free if you qualify for one.

 

Thanks - but, no, I don't think so. I've seen the passbook for my friend's Bangkok Bank account. It's the usual orange passbook they have, with 'Fixed account' printed on the cover.

 

The passbook for a Bangkok Bank savings account is different - the cover is usually blue front and back. Or with a blue back and a white front with red and bue flag pattern. (That's what I have anyway).

 

On my friend's account it looked like interest (tax deducted) was credited quarterly (every three months). Although I'm not sure whether or not he receives interest in a quarter when he withdraws money.
 

 

 

I have both types of accounts with Bangkok Bank... I  even call them Blue Book and Orange Book.

The Fixed Term deposit, yes I can transfer money into it any time I wish to, and it becomes like a new Fixed Term deposit...ie it is presented separately with its own Start and Maturity date. The term I have is only 3 months. I can take money out any time, but potentially I lose the better interest rate/ interest so far, on that particular deposit. At the moment I have 3 different Principal and 2 different maturing dates.

I can transfer money in easily, even via internet banking, but no ATM card is available on the account, and I have to go to the branch to withdraw.

 

 

Edited August 14, 2014 by jacko45k

[meatboy]

 

kerryd. quote.the thai banking system needs a massive updating.

starting with most of the staff.

Ah, the staff is fine...it's just the banking laws, rules and policies they operate under....those laws/rules/polices is what needs updating....I'm not holding my breath.

 

don't get me going pib.

[Tawai]

 

Traditional fixed account also come with a 15% withholding tax on "any" amount of interest earned...it don't have to exceed the Bt20K in interest which is referred to as a tax trigger- level in other types of savings accounts.  You can get this 15% withholding tax easily refunded by applying for the refund during Jan-Mar at your local tax revenue office....you can even apply for 3 years back worth of with holdings.   Other threads address how to apply for the refund...it's easy and a refund usually takes 2 to 6 weeks.

 

Hi PIB !

Thanks so much for your info .

This excellent news to us.

Could you please elaborate where to apply for the refund ? Is that at the tax office were we pay our monthly (salaries) and yearly (profit from business) taxes, or at the bank (with the for "Hak na tee chai" form) ?

 

This earlier thread on bank interest withholding tax refunds should provide the info you ask for.    Link.

 

And yes, you want to deal with the tax office dealing with personal income tax; not the office that deals with business/misc/VAT taxes.  Your bank will only be involved in providing you the tax letter you need to submit with your refund request.    But if you are working/paying taxes in Thailand, then you would just work the interest income and withholding into your annual tax return as above thread really focuses towards someone not earning any Thai income like from a job in Thailand...the only source of income "from within Thailand" is the savings account interest.    See above link for more info.

 

Hi Pib !

Really enjoy your helpful comments. In my case as a taxpayer in Thailand, I would NOT benefit from the tax refund because the income from interest would be accumulated to my income from work (if I understand that right).

 

Claiming the 15 % tax would make sense only for people paying LESS  than 15 % tax or none at all,( again if I got this right....)

 

My wife is also paying a higher than 15 % tax rate, so it would not make sense to lodge the money on her name. Would someone of you know if kids (10 years of age) would be able to claim - doesn't really seem to be likely... Mother in law would be an option, will think about it, but maybe too much of hassles in case of death.