Bank Term rates dropping like a stone

[elgordo38]

I was in at Bangkok bank last Friday checking on rates as I had Forex money coming in. The rates were 2.75% for 4 months and 2.50% for 7 months. Today the 4 month rate is 2.00% and the 7 month rate is 2.50%. If your doing any term bank investing I would advice you to do it right away. I think the banks must have tons of foreign capital coming in and are thus reducing their rates.

[Briggsy]

The fact that the 4-month rate was higher than the 7-month rate would suggest that this was a special promoted product. They often close when they reach the target amount they were aiming at.

To be honest 2.75% p.a. for a 4-month term looks a little too good to be true. It would have been snapped up very quickly.

[Rajhulmaheesh]

i got .30 % yearly rate on a 3 month cd in usa bank.

[petercool]

Moved to Jobs, ecomomy, banking forum

[Torrens54]

Thanks for the tip!!

[jacko45k]

The fact that the 4-month rate was higher than the 7-month rate would suggest that this was a special promoted product. They often close when they reach the target amount they were aiming at.

To be honest 2.75% p.a. for a 4-month term looks a little too good to be true. It would have been snapped up very quickly.

You have to check the amounts required to deposit to get the higher rates.

You need 100 million baht to get a higher 4 month rate, only 200k on the 7 month one.

[Stjohnm]

That's still a damn sight better than any bank in the UK will give you. I get F-all fromLloyds litterally f-all even my blue book a/c with BKKB pays better I was in the Silom branch the other day & spoke to someone & if I was in a position to park TH฿200k or more in my Orange book a/c I'd do it in a heartbeat but I don't live in LOS anymore & getting to it in an emergency would be problematic to say the least. + the exchange rate at the moment doesn't make it worthwhile. If it stays North of 50-£ & the rates are still better than the UK I'll think about it when I'm back here next year

[Mencken]

Backwardation, a sign of stress.

Might be a sign of liquidity issues and capitalization issues.

I sure wouldn't be bringing money over now, I don't see how Thailand cannot revalue. The Fed is going to raise rates which will strengthen dollar. With an artificial peg in place, I see Thailand's competitiveness evaporated. No exports, no tourists.

Rusdia, Norway, Sweden, Oz, Canada, EU, Vietnam, an endless parade - All have seen their currencies plummet.

Lowering interest rates could though be one of those ways instead of printing money. It may also at higher levels and EU in negative interest territory set itself up for varry over trade.

Thailand seems to be a bastion of tranquility but I see monumental issues ahead of it. Expect rates to lower to nothing. If that doesn't work, they willnstart the presses. Only problem with inflating currency in a olace like Thsiland is that it usually weakrns currency withiut really addressing the overarching issue because of incompetence and corruption.

Loook to Fed meetings throughout 2015 for weakening in THB.

Edited February 10, 2015 by Mencken

[Rajhulmaheesh]

Monetary fixes dont do anything but make rich richer. Halve govts the world over and you will see thai maids driving rolls royces....................lol.

[Estrada]

The rates you saw was an old advert in Bangkok Bank a long time ago. I pointed out to the Manager recently that they were advertising the old rate whilst the new rate offered was less and they still did not remove the advert. I put my money in the Thai Stock Exchange where I have earned 52% over the last 6 months. A safe bet would be BTS if you can buy at B10.00 or less. It will pay you 8% in dividends(total paid 3 -4 times/year) and value increase at least of 3-5%.

If you need the money in a Time Deposit to show immigration, then wait 3+ months to open a TD account, before you need to show the immigration officer.

[fletchsmile]

Backwardation tends to be a term applied to futures curves, particularly commodities not bank deposit rates.

The falling deposit rates are not a sign of liquidity or capital issues. Thai banks in general have adequate liquidity and are reasonably well capitalised.

Falling rates are a combination of various factors. Including: actually a sign of banks currently having plenty liquidity, so they have less demand for it hence lower rates. Loan growth has also been slow again meaning banks don't have urgent needs to compete for deposits. Yield curves are also pricing in the increased possibility of a rate cut by MPC later in the year hence again deposit rates falling.

Rates won't fall to zero as there needs to be a premium above major currencies. Unilkely MPC would go below 1.5%. While a possibility they may cut below 2%, there's also a reasonable chance they won't.

Russia and EU banking sectors at the moment bear little comparison to Thailand.

All in all Thai banks are in reasonable shape. Because of that they've no need to pay high rates to attract more money.

Cheers

Fletch

Edited February 10, 2015 by fletchsmile

[d4291797]

For info, rates in New Zealand at the top bank, ASB , I am getting 4.25% on 90 day call, 4.8% available, interest paid monthly, for five year fixed term.

Should be tax free for non resident.

Yes a month ago this was 5.8%.

Hindsight is a great thing!

[InvestingIsMyLife]

I don't understand why people (I hesitate to use the term investors) continue to invest in CD's, mutual funds, REIT's, etc. I see people compare and contrast interest rates. But when you analyze the rate of return, currency depreciation, and FEES you pay, upon exit you are left with little profit and in many cases a loss. Many people argue that their capital is secure in these accounts, without understanding that these financial institutions (HSBC, etc.) are INSOLVENT.

I can get 8% return on investment without having to store capital in these shoddy financial institutions with NO FEES.

[ToddinChonburi]

Ask about there 7 month 200,000 baht fixed. They also have a pretty good life insurance savings plan for 15 years.

[alfieconn]

Loook to Fed meetings throughout 2015 for weakening in THB.

Crikey, I didn't realize that they discuss the Thai Baht at Fed meetings

[SOUTHERNSTAR]

Backwardation tends to be a term applied to futures curves, particularly commodities not bank deposit rates.

The falling deposit rates are not a sign of liquidity or capital issues. Thai banks in general have adequate liquidity and are reasonably well capitalised.

Falling rates are a combination of various factors. Including: actually a sign of banks currently having plenty liquidity, so they have less demand for it hence lower rates. Loan growth has also been slow again meaning banks don't have urgent needs to compete for deposits. Yield curves are also pricing in the increased possibility of a rate cut by MPC later in the year hence again deposit rates falling.

Rates won't fall to zero as there needs to be a premium above major currencies. Unilkely MPC would go below 1.5%. While a possibility they may cut below 2%, there's also a reasonable chance they won't.

Russia and EU banking sectors at the moment bear little comparison to Thailand.

All in all Thai banks are in reasonable shape. Because of that they've no need to pay high rates to attract more money.

Cheers

Fletch

The weak spot for some/most Thai banks are their repo properties. If you go to their websites and look at the properties you will find that many are from the 1997/98 and 2008 crisis and are in the balance sheets at loan value not market value. We have recently travelled on the Cha-am/Petchaburi road (next to the sea) and there are plenty villages, condo's and apartment blocks that are in ruins, but on request the bank's prices was sky high. If they should revalue these properties their balance sheets will look less attractive.

[fletchsmile]

Thai banks have significantly cleaned up their balance sheets in the last decade or so.

NPLs and NPAs are now ball park 3% or under for most of the banking sector.

If you look at coverage ratios or loan loss reserve (LLR) divided by NPL/NPA most banks (not all) now have ratios above 100%.

So yes people will see these buildings around but they are generally adequately provided for vs loan value or foreclosed property value. If you look at the net value after provision on the balance sheet it's minimal in context of overall assets.

BTW The 3% is all NPLs not just real estate. So the % of foreclosed properties or bad/doubtful real estate loans held on books will be more in the ball park of 0.5% average of total loans. I.e around 0.5% of that 3% amount with 2.5% from other categories.

Go to somewhere like Vietnam on the other hand and the level of provisioning (or lack of it) for NPLs/NPAs is a whole different ball game

Cheers

Fletch

Edited February 10, 2015 by fletchsmile

[Sophon]

I was in at Bangkok bank last Friday checking on rates as I had Forex money coming in. The rates were 2.75% for 4 months and 2.50% for 7 months. Today the 4 month rate is 2.00% and the 7 month rate is 2.50%. If your doing any term bank investing I would advice you to do it right away. I think the banks must have tons of foreign capital coming in and are thus reducing their rates.

I'm afraid that there has been some misunderstanding in your communication with the bank, the rates are the same today as they were last Friday. This screen shot from Bangkok Bank's website is from last Friday (I posted it in another topic that day):

And the same information is on their website today. As you can see, you can still get the 2.75% p.a. but only for amounts in excess of 100 million Baht. For amounts below 50 million Baht the rate is (and was last Friday as well) 2.0% p.a.

Sophon

Edited February 10, 2015 by Sophon

[joboss]

I don't understand why people (I hesitate to use the term investors) continue to invest in CD's, mutual funds, REIT's, etc. I see people compare and contrast interest rates. But when you analyze the rate of return, currency depreciation, and FEES you pay, upon exit you are left with little profit and in many cases a loss. Many people argue that their capital is secure in these accounts, without understanding that these financial institutions (HSBC, etc.) are INSOLVENT.

I can get 8% return on investment without having to store capital in these shoddy financial institutions with NO FEES.

Where? Please enlighten me. Will I need to break the law? Carry a gun? Look over my shoulder 24/7?

Edited February 10, 2015 by joboss

[InvestingIsMyLife]

I don't understand why people (I hesitate to use the term investors) continue to invest in CD's, mutual funds, REIT's, etc. I see people compare and contrast interest rates. But when you analyze the rate of return, currency depreciation, and FEES you pay, upon exit you are left with little profit and in many cases a loss. Many people argue that their capital is secure in these accounts, without understanding that these financial institutions (HSBC, etc.) are INSOLVENT.

I can get 8% return on investment without having to store capital in these shoddy financial institutions with NO FEES.

Where? Please enlighten me. Will I need to break the law? Carry a gun? Look over my shoulder 24/7?

1. Where depends on which country you store your capital (to avoid foreign exchange fees). As this moment, Hong Kong, UK, and US, but other markets are possible.

2. No law breaking, this is 100% legitimate. You will have to pay capital gains tax in your country. Or, you can form a corporation and avoid taxes for the most part.

3. No guns and no security issues.

PM me to discuss.

[topt]

I don't understand why people (I hesitate to use the term investors) continue to invest in CD's, mutual funds, REIT's, etc. I see people compare and contrast interest rates. But when you analyze the rate of return, currency depreciation, and FEES you pay, upon exit you are left with little profit and in many cases a loss. Many people argue that their capital is secure in these accounts, without understanding that these financial institutions (HSBC, etc.) are INSOLVENT.

I can get 8% return on investment without having to store capital in these shoddy financial institutions with NO FEES.

Where? Please enlighten me. Will I need to break the law? Carry a gun? Look over my shoulder 24/7?

1. Where depends on which country you store your capital (to avoid foreign exchange fees). As this moment, Hong Kong, UK, and US, but other markets are possible.

2. No law breaking, this is 100% legitimate. You will have to pay capital gains tax in your country. Or, you can form a corporation and avoid taxes for the most part.

3. No guns and no security issues.

PM me to discuss.

If you are UK non res for tax why would you be paying any CGT?

[InvestingIsMyLife]

I don't understand why people (I hesitate to use the term investors) continue to invest in CD's, mutual funds, REIT's, etc. I see people compare and contrast interest rates. But when you analyze the rate of return, currency depreciation, and FEES you pay, upon exit you are left with little profit and in many cases a loss. Many people argue that their capital is secure in these accounts, without understanding that these financial institutions (HSBC, etc.) are INSOLVENT.

I can get 8% return on investment without having to store capital in these shoddy financial institutions with NO FEES.

Where? Please enlighten me. Will I need to break the law? Carry a gun? Look over my shoulder 24/7?

1. Where depends on which country you store your capital (to avoid foreign exchange fees). As this moment, Hong Kong, UK, and US, but other markets are possible.

2. No law breaking, this is 100% legitimate. You will have to pay capital gains tax in your country. Or, you can form a corporation and avoid taxes for the most part.

3. No guns and no security issues.

PM me to discuss.

If you are UK non res for tax why would you be paying any CGT?

That's my point, you shouldn't be paying any CGT. If you are a resident of the UK, US, etc., there are ways to minimize or eliminate your tax liability.

[Anthony5]

I don't understand why people (I hesitate to use the term investors) continue to invest in CD's, mutual funds, REIT's, etc. I see people compare and contrast interest rates. But when you analyze the rate of return, currency depreciation, and FEES you pay, upon exit you are left with little profit and in many cases a loss. Many people argue that their capital is secure in these accounts, without understanding that these financial institutions (HSBC, etc.) are INSOLVENT.

I can get 8% return on investment without having to store capital in these shoddy financial institutions with NO FEES.

Where? Please enlighten me. Will I need to break the law? Carry a gun? Look over my shoulder 24/7?

1. Where depends on which country you store your capital (to avoid foreign exchange fees). As this moment, Hong Kong, UK, and US, but other markets are possible.

2. No law breaking, this is 100% legitimate. You will have to pay capital gains tax in your country. Or, you can form a corporation and avoid taxes for the most part.

3. No guns and no security issues.

PM me to discuss.

Why everyone interested has to PM you?

If it is legitimate, secure and pretty much a guaranteed yield, why can't you just post it on the forum?

[NeverSure]

I don't understand why people (I hesitate to use the term investors) continue to invest in CD's, mutual funds, REIT's, etc. I see people compare and contrast interest rates. But when you analyze the rate of return, currency depreciation, and FEES you pay, upon exit you are left with little profit and in many cases a loss. Many people argue that their capital is secure in these accounts, without understanding that these financial institutions (HSBC, etc.) are INSOLVENT.

I can get 8% return on investment without having to store capital in these shoddy financial institutions with NO FEES.

Where? Please enlighten me. Will I need to break the law? Carry a gun? Look over my shoulder 24/7?

1. Where depends on which country you store your capital (to avoid foreign exchange fees). As this moment, Hong Kong, UK, and US, but other markets are possible.

2. No law breaking, this is 100% legitimate. You will have to pay capital gains tax in your country. Or, you can form a corporation and avoid taxes for the most part.

3. No guns and no security issues.

PM me to discuss.

Why everyone interested has to PM you?

If it is legitimate, secure and pretty much a guaranteed yield, why can't you just post it on the forum?

PM me instead. If you send me 100 million baht I will guarantee you'll never see your money again.

[InvestingIsMyLife]

I don't understand why people (I hesitate to use the term investors) continue to invest in CD's, mutual funds, REIT's, etc. I see people compare and contrast interest rates. But when you analyze the rate of return, currency depreciation, and FEES you pay, upon exit you are left with little profit and in many cases a loss. Many people argue that their capital is secure in these accounts, without understanding that these financial institutions (HSBC, etc.) are INSOLVENT.

I can get 8% return on investment without having to store capital in these shoddy financial institutions with NO FEES.

Where? Please enlighten me. Will I need to break the law? Carry a gun? Look over my shoulder 24/7?

1. Where depends on which country you store your capital (to avoid foreign exchange fees). As this moment, Hong Kong, UK, and US, but other markets are possible.

2. No law breaking, this is 100% legitimate. You will have to pay capital gains tax in your country. Or, you can form a corporation and avoid taxes for the most part.

3. No guns and no security issues.

PM me to discuss.

Why everyone interested has to PM you?

If it is legitimate, secure and pretty much a guaranteed yield, why can't you just post it on the forum?

Because potential investors need to be qualified first. There are rules and regulations to investing and many laws prohibit posting investment opportunities online without first qualifying investors.

[Anthony5]

Where? Please enlighten me. Will I need to break the law? Carry a gun? Look over my shoulder 24/7?

1. Where depends on which country you store your capital (to avoid foreign exchange fees). As this moment, Hong Kong, UK, and US, but other markets are possible.

2. No law breaking, this is 100% legitimate. You will have to pay capital gains tax in your country. Or, you can form a corporation and avoid taxes for the most part.

3. No guns and no security issues.

PM me to discuss.

Why everyone interested has to PM you?

If it is legitimate, secure and pretty much a guaranteed yield, why can't you just post it on the forum?

Because potential investors need to be qualified first. There are rules and regulations to investing and many laws prohibit posting investment opportunities online without first qualifying investors.

Thanks for clarifying that this is indeed not for the average investors, but only for investors qualified by you.

Still promoting the pyramid scam yes?

[InvestingIsMyLife]

"Thanks for clarifying that this is indeed not for the average investors, but only for investors qualified by you."

Still promoting the pyramid scam yes?

First of all, there is a difference between and accredited investor and an investor. When dealing with American investors, by law, I have to determine if they are accredited or not.

Second, 8% returns are hardly pyramid scheme numbers. And while pyramid schemes have taken place at similar rates (i.e. Bernie Madoff), this is not a pyramid scheme. This investment has a verifiable track record.

Third, you did not take the time to inquire or perform proper due diligence. You simply blurted out a slanderous statement to make yourself appear to have knowledge about a topic that you really have none. "Still promoting the pyramid scheme yes?" infers that this investment is a pyramid scheme and is ongoing. This is blatantly false and a lie.

To back up my point, I AM WILLING TO CALL YOU OUT HERE ON THAI VISA AND BET YOU $10,000 USD THAT THIS IS NOT A PYRAMID SCHEME AND YOU HAVE MADE A FRIVOLOUS AND SLANDEROUS ACCUSATION WITH NO BACKING WHATSOEVER. If you give the funds to an attorney that we both mutually agree upon and you sign a waiver, I will be happy to provide that attorney with documentation that shows this in not, in fact, a pyramid scheme. Put your money where your mouth is.

Edited February 11, 2015 by InvestingIsMyLife

[fletchsmile]

"Thanks for clarifying that this is indeed not for the average investors, but only for investors qualified by you."

Still promoting the pyramid scam yes?

First of all, there is a difference between and accredited investor and an investor. When dealing with American investors, by law, I have to determine if they are accredited or not.

Second, 8% returns are hardly pyramid scheme numbers. And while pyramid schemes have taken place at similar rates (i.e. Bernie Madoff), this is not a pyramid scheme. This investment has a verifiable track record.

Third, you did not take the time to inquire or perform proper due diligence. You simply blurted out a slanderous statement to make yourself appear to have knowledge about a topic that you really have none. "Still promoting the pyramid scheme yes?" infers that this investment is a pyramid scheme and is ongoing. This is blatantly false and a lie.

To back up my point, I AM WILLING TO CALL YOU OUT HERE ON THAI VISA AND BET YOU $10,000 USD THAT THIS IS NOT A PYRAMID SCHEME AND YOU HAVE MADE A FRIVOLOUS AND SLANDEROUS ACCUSATION WITH NO BACKING WHATSOEVER. If you give the funds to an attorney that we both mutually agree upon and you sign a waiver, I will be happy to provide that attorney with documentation that shows this in not, in fact, a pyramid scheme. Put your money where your mouth is.

Why not start your own thread? and let it stand or fall on its own merits.

Every single one of your posts is going further off topic and nothing to do with OP's post or bank interest rates.

Bad form to hijack someone else's - particularly just to peddle your own wares.

Cheers

Fletch

[SheungWan]

Why everyone interested has to PM you?

If it is legitimate, secure and pretty much a guaranteed yield, why can't you just post it on the forum?

Because potential investors need to be qualified first. There are rules and regulations to investing and many laws prohibit posting investment opportunities online without first qualifying investors.

Didn't BM promise 8% and make it difficult to invest with him as come-on sugar?

[InvestingIsMyLife]

My intention was not to hijack this thread. I'm not "peddling my wares". If I was actively seeking capital infusions, I would start a thread.

I simply stated that financial instruments offered by banks are poor investments. To exemplify, I mentioned I can get a conservative 8% ROI with NO FEES. Some members of this forum then took it upon themselves to slander me to which I responded with logical rebuttals.

People who know me, know that I have a proven track record. I have an office on Wall St. I can very selective with who I take on. I often give free advice to members of these forums. I don't ask for anything in return. However, I am going to defend myself when people make frivolous and slanderous accusations about me or my ventures.

There are a lot of scams here in Thailand and throughout the world. I was just trying to help those looking for investment advice. Unfortunately people who talk slanderous nonsense on these forums enable the scammers, because legitimate investors like myself don't want to spend hours defending legitimate and proven investments to those clueless about investing.