Long-term Bank Accounts for Thai Children

[scorecard]

Can any members, hopefully with recent experience on this subject, please share their knowledge. Looking for facts please, not 'should be' / opinions etc.

I want to start another savings stream for two children, hopefully in bank accounts that can't be touched until both children reach majority at 18 or even older.

Can't be touched is extremely important in this case, no need to give reasons.

I have approached 3 mainstream banks but I just can't seem to get clear answers. I called the HO of one bank and they shocked me by saying 'it's possible for the parent to talk to the local bank manager and the local bank manager can agree (without talking to the HO) to give the funds to either parent at any time'. 'Up to the local bank manager'.

I realize there are positives and negatives involved. From my understanding:

- There are such accounts available, normally one parent or official guardian holds the bank book but cannot withdraw funds unless by court order.

- On maturity (child reaches 18 years old - Thai official age of maturity) the child automatically takes over total control of the account. At age of maturity no need for court order and no need for the now adult (by law) to make an official application to the bank to take it over.

- First question: Can the adult who starts the account stipulate that the child takes control at an older age, say 20, 25 etc., and not at 18 (age of official maturity)?

- From my understanding if it's a generic savings account then nobody can move the funds in and out of the generic savings account, for example into 3 month / 6 month term deposits or similar. Is this correct?

- Final point:

- Would appreciate any comments from members who have taken such accounts.

- Any members know of any other bank products in Thailand which cannot be touched until age of maturity but there is flexibility to move the funds in and out of term deposits, etc?

[Pomthai]

Don't know about the banking side of things but what you describe as maturity in Thailand is aged 20. Under the age of 20 and people are considered juveniles. Adult at 20 years old.

[scorecard]

Don't know about the banking side of things but what you describe as maturity in Thailand is aged 20. Under the age of 20 and people are considered juveniles. Adult at 20 years old.

Thanks.

initially I wasn't sure whether it was 18 or 20. I mentioned 18 in my post because the first bank manager I spoke to said 18.

Since I wrote my post earlier this morning I've called the Bkk HO of another high profile Thai bank and was told 18, when I queried whether it was 18 or 20 the bank offer said, just a moment I will check, she came back and said 20 but maybe some local bank managers have their own policy of 18.

I asked are they allowed to do that? Answer: 'Up to the local bank manager'. I responded: 'Are they allowed to do that if the law says 20?' Response: 'Well maybe the law says 20 but the bank manager is just trying to help customers.'

I will post the question to 'ask the lawyer'.

Thanks again, a good point to get resolved.

[khunPer]

I can inform OP about my personal experience with child savings here in Thailand.

Until the age of 20, the “child” is under guardian, who in view of a bank account normally would be either mother or father, as a bank typically lists two names in the account, and one is the minor.

Government Savings Bank is often preferred by Thais, and GSB has a 3-year (36-month) fixed account, with slightly higher interest then a fixed 12-month.

Normally, to my knowledge, the guardian can dispose on behalf of the minor, i.e. withdraw money; however there might be conditions available I’m not familiar with.

I started up with a child-savings in GSB, but expended soon to also another bank. It’s no problem – no questions asked – for the guardian to withdraw money. In the other bank “my child” use – in this case SCB – we opened a normal bank account tied to a Fund Book Account. The latter is mutual funds and that requires a bit more paperwork – but again the guardian signs alone on behalf of the minor – and you can choose between quite safe bonds or LTFs (Long Term Funds). The bonds, looked from a saving point of view, has the benefit that the accumulating interest is slightly higher than in a fixed account, and there is not withholding tax, i.e. 15 percent. The LTFs, often a mix between safe bonds and equity, cannot be sold within 5 years (tax benefits), and typically gives a slightly better outcome than the bonds only. Again, the guardian can sell and dispose, but it’s more complicated, which may make it little more secure.

Perhaps asking K-Bank (Kasikorn Bank) if they have any suggestions, they seem to have more or better options, and also seem to be more experienced in handling foreign clients (I also use K-Bank for my private investments and savings).

If it’s a larger amount, another option can be buying a plot of Chanute land, as Land Office seems to protect the minor’s interest quite well. Furthermore it may be a question of some legal documents approving guardian ship – perhaps just like approving legal father ship in Thailand – moderator Mario2008 may be able to give you some useful information about this.

[Borzandy]

The problem in Thailand is that the Thai parent can ALWAYS withdraw the money from a child bank account. Whatever the bribe to be paid.

[scorecard]

The problem in Thailand is that the Thai parent can ALWAYS withdraw the money from a child bank account. Whatever the bribe to be paid.

Yesterday I had more discussions with perhaps the two highest profile Thai banks on this very point.

In reality both banks have no products whatever whereby after the savings account is opened it cannot be touched (except by court order) until an age (of the child) nominated in advance.

Different point:

- One bank told me that they will open an account with the primary name being the adult who opened the account but the record also shows the name of the child concerned. This bank said the 'primary' person can only be one adult and it can be any adult.

- Second bank, pretty much the same except that the primary person must be two people and both must sign any withdrawals.

Both banks confirmed withdrawals can be made at any time, no questions asked.

[scorecard]

I can inform OP about my personal experience with child savings here in Thailand.

Until the age of 20, the “child” is under guardian, who in view of a bank account normally would be either mother or father, as a bank typically lists two names in the account, and one is the minor.

Government Savings Bank is often preferred by Thais, and GSB has a 3-year (36-month) fixed account, with slightly higher interest then a fixed 12-month.

Normally, to my knowledge, the guardian can dispose on behalf of the minor, i.e. withdraw money; however there might be conditions available I’m not familiar with.

I started up with a child-savings in GSB, but expended soon to also another bank. It’s no problem – no questions asked – for the guardian to withdraw money. In the other bank “my child” use – in this case SCB – we opened a normal bank account tied to a Fund Book Account. The latter is mutual funds and that requires a bit more paperwork – but again the guardian signs alone on behalf of the minor – and you can choose between quite safe bonds or LTFs (Long Term Funds). The bonds, looked from a saving point of view, has the benefit that the accumulating interest is slightly higher than in a fixed account, and there is not withholding tax, i.e. 15 percent. The LTFs, often a mix between safe bonds and equity, cannot be sold within 5 years (tax benefits), and typically gives a slightly better outcome than the bonds only. Again, the guardian can sell and dispose, but it’s more complicated, which may make it little more secure.

Perhaps asking K-Bank (Kasikorn Bank) if they have any suggestions, they seem to have more or better options, and also seem to be more experienced in handling foreign clients (I also use K-Bank for my private investments and savings).

If it’s a larger amount, another option can be buying a plot of Chanute land, as Land Office seems to protect the minor’s interest quite well. Furthermore it may be a question of some legal documents approving guardian ship – perhaps just like approving legal father ship in Thailand – moderator Mario2008 may be able to give you some useful information about this.

Thanks for the comment, much appreciated.

I did check with K bank and I was surprised that they have no products at all in this vein.

I also checked with BBL, they have a 24 month accumulating deposit product:

- Customer nominates a monthly deposit amount (1,000 - 25,000Baht).

- At 24 months all retuned to customer plus 2.5% interest. (in terms of tax I couldn't get a clear answer.)

- At 24 months the total amount can be rolled over and start again.

This info. from BBL HO telephone support.

[NeverSure]

I don't know Thai laws. Is there no way to set up something similar to a trust with you being the trustee and the real owner/grantor of the trust? The trust has terms for when it reverts to the child but the bank doesn't control that? You do need a couple of successor trustees in the event something terrible happens to you.

Can you set this up in your home country? When I was a banker the bank had a trust department which managed trusts as trustee. It wasn't very expensive because between the time it's set up and later disbursed there's nothing really to do. You name alternate beneficiaries in case something happens to the child and just let it ride. In a country with the rule of law no one is getting that money except the named beneficiaries and not before the named date. You would always maintain the right to amend the trust including changing trustee or beneficiaries or adding or reducing assets because you were the original grantor in the trust.

Edited June 10, 2015 by NeverSure

[khunPer]

I don't know Thai laws. Is there no way to set up something similar to a trust with you being the trustee and the real owner/grantor of the trust? The trust has terms for when it reverts to the child but the bank doesn't control that? You do need a couple of successor trustees in the event something terrible happens to you.

Can you set this up in your home country? When I was a banker the bank had a trust department which managed trusts as trustee. It wasn't very expensive because between the time it's set up and later disbursed there's nothing really to do. You name alternate beneficiaries in case something happens to the child and just let it ride. In a country with the rule of law no one is getting that money except the named beneficiaries and not before the named date. You would always maintain the right to amend the trust including changing trustee or beneficiaries or adding or reducing assets because you were the original grantor in the trust.

In other treads it has (unfortunately) been mentioned that there is no such thing as Trusts in Thailand.