Using fixed deposit account for retirement visa - warning!

[Pib]

Bangkok Bank don't automatically renew a Deposit A/c as they are for fixed terms. They automatically revert to a Savings A/c if you do nothing.

I have an 11 month Fixed Deposit A/C @ 2.8%

The interest is taxed at 15%

I also have a Savings A/C @ 0.5%

The Interest isn't taxed if it's under 10,000 baht in any year.

At the beginning of a New Year ask Bangkok Bank for a Statement of Tax paid on any Interest for the previous year.

Take that statement along with your Passport to your local Tax Office. (on the first visit you will be allocated a Tax ref number)

You'll receive a cheque a few weeks later reimbursing any tax you paid the previous year.

Every promotion/special Bangkok Bank fixed account I have had has automatically rolled over into a 3 month fixed deposit rate which pays a little more than twice the interest of a regular savings account. This is per the terms and conditions. Just last month my Bangkok Bank 15 month, 3.25% fixed account matured and it automatically rolled over into a 3 month fixed rate paying 1.125%. This is around my 5th fixed account with Bangkok Bank and this has occurred each time. However, my fixed accounts were always entered under the Promotional Rate like the 11 month, 2.8% deposit you have...and it the deposit I rolled the 15 month mature account into.

Below is a cut and paste from the Bankgok Bank website regarding how your 11 month, 2.8% fixed deposit will be automatically rolled over into a 3 month fixed rate; not a new account...not a regular savings account paying 0.5%. See weblink below under deposit conditions for full details

http://www.bangkokbank.com/BangkokBank/PersonalBanking/DailyBanking/Accounts/FixedDeposits/Pages/SpecialFixedDeposits.aspx

However, but, if you enter a fixed account at a non-promotional rate I think the auto rollover conditions are different and the amount will be rolled over into the same term period paying whatever the rate is at that time. Ex: a non-promotional 12 month fixed account matured and it had been paying 1.5%...it will auto rollover into another 12 month term paying whatever the rate is at that time for a 12 month term.

Yes, a 15% withholding tax applies to fixed accounts, but for a regular savings account they do not withhold any tax until exceeding Bt20K earned interest per year. That 10K you mention I think applies to an exemption amount if you are filing an income tax return....just one of various exemptions available in a regular tax return.

Edited January 13, 2015 by Pib

[chiang mai]

At most banks in Thailand, customers must specify whether they wish a matured account to be rolled over into the closest paying term/rate account or not. If the customer does not state their preference, branch staff will chose an option for them! Really, in 2015, isn't this part of banking 101 less 100!

[asiaexpat]

Bangkok Bank don't automatically renew a Deposit A/c as they are for fixed terms. They automatically revert to a Savings A/c if you do nothing.

I have an 11 month Fixed Deposit A/C @ 2.8%

The interest is taxed at 15%

I also have a Savings A/C @ 0.5%

The Interest isn't taxed if it's under 10,000 baht in any year.

At the beginning of a New Year ask Bangkok Bank for a Statement of Tax paid on any Interest for the previous year.

Take that statement along with your Passport to your local Tax Office. (on the first visit you will be allocated a Tax ref number)

You'll receive a cheque a few weeks later reimbursing any tax you paid the previous year.

Every promotion/special Bangkok Bank fixed account I have had has automatically rolled over into a 3 month fixed deposit rate which pays a little more than twice the interest of a regular savings account. This is per the terms and conditions. Just last month my Bangkok Bank 15 month, 3.25% fixed account matured and it automatically rolled over into a 3 month fixed rate paying 1.125%. This is around my 5th fixed account with Bangkok Bank and this has occurred each time. However, my fixed accounts were always entered under the Promotional Rate like the 11 month, 2.8% deposit you have...and it the deposit I rolled the 15 month mature account into.

Below is a cut and paste from the Bankgok Bank website regarding how your 11 month, 2.8% fixed deposit will be automatically rolled over into a 3 month fixed rate; not a new account...not a regular savings account paying 0.5%. See weblink below under deposit conditions for full details

http://www.bangkokbank.com/BangkokBank/PersonalBanking/DailyBanking/Accounts/FixedDeposits/Pages/SpecialFixedDeposits.aspx

Capture.JPG

However, but, if you enter a fixed account at a non-promotional rate I think the auto rollover conditions are different and the amount will be rolled over into the same term period paying whatever the rate is at that time. Ex: a non-promotional 12 month fixed account matured and it had been paying 1.5%...it will auto rollover into another 12 month term paying whatever the rate is at that time for a 12 month term.

Yes, a 15% withholding tax applies to fixed accounts, but for a regular savings account they do not withhold any tax until exceeding Bt20K earned interest per year. That 10K you mention I think applies to an exemption amount if you are filing an income tax return....just one of various exemptions available in a regular tax return.

My experience with BB over the last 4 years is the same.

[Liquorice]

Pib, on 13 Jan 2015 - 18:37, said:Pib, on 13 Jan 2015 - 18:37, said:

Faz, on 13 Jan 2015 - 10:58, said:Faz, on 13 Jan 2015 - 10:58, said:

Bangkok Bank don't automatically renew a Deposit A/c as they are for fixed terms. They automatically revert to a Savings A/c if you do nothing.

I have an 11 month Fixed Deposit A/C @ 2.8%

The interest is taxed at 15%

I also have a Savings A/C @ 0.5%

The Interest isn't taxed if it's under 10,000 baht in any year.

At the beginning of a New Year ask Bangkok Bank for a Statement of Tax paid on any Interest for the previous year.

Take that statement along with your Passport to your local Tax Office. (on the first visit you will be allocated a Tax ref number)

You'll receive a cheque a few weeks later reimbursing any tax you paid the previous year.

Every promotion/special Bangkok Bank fixed account I have had has automatically rolled over into a 3 month fixed deposit rate which pays a little more than twice the interest of a regular savings account. This is per the terms and conditions. Just last month my Bangkok Bank 15 month, 3.25% fixed account matured and it automatically rolled over into a 3 month fixed rate paying 1.125%. This is around my 5th fixed account with Bangkok Bank and this has occurred each time. However, my fixed accounts were always entered under the Promotional Rate like the 11 month, 2.8% deposit you have...and it the deposit I rolled the 15 month mature account into.

Below is a cut and paste from the Bankgok Bank website regarding how your 11 month, 2.8% fixed deposit will be automatically rolled over into a 3 month fixed rate; not a new account...not a regular savings account paying 0.5%. See weblink below under deposit conditions for full details

http://www.bangkokbank.com/BangkokBank/PersonalBanking/DailyBanking/Accounts/FixedDeposits/Pages/SpecialFixedDeposits.aspx

Capture.JPG

However, but, if you enter a fixed account at a non-promotional rate I think the auto rollover conditions are different and the amount will be rolled over into the same term period paying whatever the rate is at that time. Ex: a non-promotional 12 month fixed account matured and it had been paying 1.5%...it will auto rollover into another 12 month term paying whatever the rate is at that time for a 12 month term.

Yes, a 15% withholding tax applies to fixed accounts, but for a regular savings account they do not withhold any tax until exceeding Bt20K earned interest per year. That 10K you mention I think applies to an exemption amount if you are filing an income tax return....just one of various exemptions available in a regular tax return.

Thanks for the information Pib.

I renew my Fixed Deposit A/c on the day or day after they mature.

I initially did a 4 month Fixed Deposit A/c so my renewals didn't conflict with my extensions.

I'm not sure the 11 month Fixed Deposit A/C is a promotional one.

The 3, 4 and 11 months one's have been around a long time.

With the Savings A/C the interest is paid twice a year, so each separate period you could receive up to 10,000 baht without paying tax.

Not necessarily 20,000 per year as one period you could be taxed and not another, but your total interest could be less than 20,000 for the year.

That is how the bank explained it to me.

You certainly had a lucky day with Immigration on that occasion....at least common sense prevailed.

The God's must be smiling on both of us because when I took my statement of interest received and tax paid to the local tax office today to reclaim the tax, I expected a language problem. Well it turned out the Boss not only speaks good English but she is one of my g/f best friends.

She told me she'll sort it out and give me a ring in a couple of days to collect the cheque.

In and out in 10 minutes............wonderful.

Sometimes life is made easier by 'who' you know, rather than 'what' you know.

Edited January 13, 2015 by Faz

[Liquorice]

Faz, on 13 Jan 2015 - 19:10, said:

Pib, on 13 Jan 2015 - 18:37, said:Pib, on 13 Jan 2015 - 18:37, said:Pib, on 13 Jan 2015 - 18:37, said:

Faz, on 13 Jan 2015 - 10:58, said:Faz, on 13 Jan 2015 - 10:58, said:Faz, on 13 Jan 2015 - 10:58, said:

Bangkok Bank don't automatically renew a Deposit A/c as they are for fixed terms. They automatically revert to a Savings A/c if you do nothing.

I have an 11 month Fixed Deposit A/C @ 2.8%

The interest is taxed at 15%

I also have a Savings A/C @ 0.5%

The Interest isn't taxed if it's under 10,000 baht in any year.

At the beginning of a New Year ask Bangkok Bank for a Statement of Tax paid on any Interest for the previous year.

Take that statement along with your Passport to your local Tax Office. (on the first visit you will be allocated a Tax ref number)

You'll receive a cheque a few weeks later reimbursing any tax you paid the previous year.

Every promotion/special Bangkok Bank fixed account I have had has automatically rolled over into a 3 month fixed deposit rate which pays a little more than twice the interest of a regular savings account. This is per the terms and conditions. Just last month my Bangkok Bank 15 month, 3.25% fixed account matured and it automatically rolled over into a 3 month fixed rate paying 1.125%. This is around my 5th fixed account with Bangkok Bank and this has occurred each time. However, my fixed accounts were always entered under the Promotional Rate like the 11 month, 2.8% deposit you have...and it the deposit I rolled the 15 month mature account into.

Below is a cut and paste from the Bankgok Bank website regarding how your 11 month, 2.8% fixed deposit will be automatically rolled over into a 3 month fixed rate; not a new account...not a regular savings account paying 0.5%. See weblink below under deposit conditions for full details

http://www.bangkokbank.com/BangkokBank/PersonalBanking/DailyBanking/Accounts/FixedDeposits/Pages/SpecialFixedDeposits.aspx

Capture.JPG

However, but, if you enter a fixed account at a non-promotional rate I think the auto rollover conditions are different and the amount will be rolled over into the same term period paying whatever the rate is at that time. Ex: a non-promotional 12 month fixed account matured and it had been paying 1.5%...it will auto rollover into another 12 month term paying whatever the rate is at that time for a 12 month term.

Yes, a 15% withholding tax applies to fixed accounts, but for a regular savings account they do not withhold any tax until exceeding Bt20K earned interest per year. That 10K you mention I think applies to an exemption amount if you are filing an income tax return....just one of various exemptions available in a regular tax return.

Thanks for the information Pib.

I renew my Fixed Deposit A/c on the day or day after they mature.

I initially did a 4 month Fixed Deposit A/c so my renewals didn't conflict with my extensions.

I'm not sure the 11 month Fixed Deposit A/C is a promotional one.

The 3, 4 and 11 months one's have been around a long time.

With the Savings A/C the interest is paid twice a year, so each separate period you could receive up to 10,000 baht without paying tax.

Not necessarily 20,000 per year as one period you could be taxed and not another, but your total interest could be less than 20,000 for the year.

That is how the bank explained it to me.

My initial post should have said 10,000 per period, not per year......my apologises

You certainly had a lucky day with Immigration on that occasion....at least common sense prevailed.

The God's must be smiling on both of us because when I took my statement of interest received and tax paid to the local tax office today to reclaim the tax, I expected a language problem. Well it turned out the Boss not only speaks good English but she is one of my g/f best friends.

She told me she'll sort it out and give me a ring in a couple of days to collect the cheque.

In and out in 10 minutes............wonderful.

Sometimes life is made easier by 'who' you know, rather than 'what' you know.

[Pib]

With the Savings A/C the interest is paid twice a year, so each separate period you could receive up to 10,000 baht without paying tax.

Not necessarily 20,000 per year as one period you could be taxed and not another, but your total interest could be less than 20,000 for the year.

That is how the bank explained it to me.

Here's some Thai Revenue Dept regulations on regarding the withholding of tax on regular savings deposits....it's Bt20K per year. Although many banks do pay interest twice a year in Jun and Dec I couldn't say if there is a Bt10K trigger level per six month period...or if the interest is paid quarterly and exceeds Bt5K then interest is withheld. I just know I've never ever had any interest withheld from my regular savings accounts because I've never earned more than Bt20K interest per year. But hey, maybe banks do have a policy to play it safe and withhold interest on a regular savings account if paid more than B10K interest per six month period...maybe related to the second tax regulation referenced below talking about a Bt10,000 interest exemption.

To earn more than Bt20,000 interest per year or Bt10,000 per six months at the current 0.5% regular savings account rate a person would need over Bt4M in the account...I doubt many people keep that much money is a regular savings account....if they do they should seriously consider putting some of that money in a much higher interest paying fixed deposit or even what I call a hybrid fixed deposit which allows X withdrawals per month without interest penalty like on fixed deposits and still pays a lot more than a regular savings account but less than a traditional fixed deposit.

Depending on "how much" a person had in the account "and when" during a year, I could see someone earning say Bt11K for the Jun interest payments, then withdrawing some of the balance for whatever reason, and then during the second half of the year for the Dec interest payment only earning say Bt8K interest which would total up to Bt19K interest earned for the whole year which falls below the Bt20K annual trigger level. See this Thai Reveneue Dept weblink, Under Interest (2), which talks about what may be excluded from a person's personal income tax: "interest on saving deposits in commercial banks if the aggregate amount of interest received is not more than 20,000 baht during a taxable year." This is probably the reason banks don't withhold tax on regular savings accounts until exceeding Bt20K per year unless its a fixed account which does require a 15% withholding tax on any amount of interest earned.

And then here's another Thai Revenue Dept regulation taking about a Bt10,000 interest tax "exemption" throughout the tax year...see this weblink under Section 42 (8)c : Interest on savings deposit with a bank in Thailand which is repayable on demand; only in the case where the total amount of interest received by any taxpayer does not exceed 10,000 baht throughout tax year, in accordance with the rules, procedures and conditions as prescribed by the Director- General. Maybe this reference triggers banks to withholding tax on a regular savings account if more than Bt10,000 is paid in any interest payment throughout the year? I don't know.

Like most govt tax documents, review of them can hurt a person's head in trying to understand them. I'm glad I don't have to fill a Thai tax return; just the interest withholding tax refund form each year. I have a hard enough time trying to understand my home country tax regs (U.S.) since I do have to file a U.S. income tax return yearly.

It can get confusing between what the banks are required to withhold on certain types of savings products and then exemptions associated with tax returns. In fact, I'm confused right now and hitting Add Reply so I don't ramble on any more.

[ToddinChonburi]

Just found this post and I had the wrong information before. This is very good info and should be updated regulary for new expats.

[ToddinChonburi]

Some banks want a work permit. I have tried several to get a better interest rate and they say must have work permit.

[ToddinChonburi]

With the Savings A/C the interest is paid twice a year, so each separate period you could receive up to 10,000 baht without paying tax.

Not necessarily 20,000 per year as one period you could be taxed and not another, but your total interest could be less than 20,000 for the year.

That is how the bank explained it to me.

Here's some Thai Revenue Dept regulations on regarding the withholding of tax on regular savings deposits....it's Bt20K per year. Although many banks do pay interest twice a year in Jun and Dec I couldn't say if there is a Bt10K trigger level per six month period...or if the interest is paid quarterly and exceeds Bt5K then interest is withheld. I just know I've never ever had any interest withheld from my regular savings accounts because I've never earned more than Bt20K interest per year. But hey, maybe banks do have a policy to play it safe and withhold interest on a regular savings account if paid more than B10K interest per six month period...maybe related to the second tax regulation referenced below talking about a Bt10,000 interest exemption.

To earn more than Bt20,000 interest per year or Bt10,000 per six months at the current 0.5% regular savings account rate a person would need over Bt4M in the account...I doubt many people keep that much money is a regular savings account....if they do they should seriously consider putting some of that money in a much higher interest paying fixed deposit or even what I call a hybrid fixed deposit which allows X withdrawals per month without interest penalty like on fixed deposits and still pays a lot more than a regular savings account but less than a traditional fixed deposit.

Depending on "how much" a person had in the account "and when" during a year, I could see someone earning say Bt11K for the Jun interest payments, then withdrawing some of the balance for whatever reason, and then during the second half of the year for the Dec interest payment only earning say Bt8K interest which would total up to Bt19K interest earned for the whole year which falls below the Bt20K annual trigger level. See this Thai Reveneue Dept weblink, Under Interest (2), which talks about what may be excluded from a person's personal income tax: "interest on saving deposits in commercial banks if the aggregate amount of interest received is not more than 20,000 baht during a taxable year." This is probably the reason banks don't withhold tax on regular savings accounts until exceeding Bt20K per year unless its a fixed account which does require a 15% withholding tax on any amount of interest earned.

And then here's another Thai Revenue Dept regulation taking about a Bt10,000 interest tax "exemption" throughout the tax year...see this weblink under Section 42 (8)c : Interest on savings deposit with a bank in Thailand which is repayable on demand; only in the case where the total amount of interest received by any taxpayer does not exceed 10,000 baht throughout tax year, in accordance with the rules, procedures and conditions as prescribed by the Director- General. Maybe this reference triggers banks to withholding tax on a regular savings account if more than Bt10,000 is paid in any interest payment throughout the year? I don't know.

Like most govt tax documents, review of them can hurt a person's head in trying to understand them. I'm glad I don't have to fill a Thai tax return; just the interest withholding tax refund form each year. I have a hard enough time trying to understand my home country tax regs (U.S.) since I do have to file a U.S. income tax return yearly.

It can get confusing between what the banks are required to withhold on certain types of savings products and then exemptions associated with tax returns. In fact, I'm confused right now and hitting Add Reply so I don't ramble on any more.

I think they just take 15% right out of your account of the interest.