Fixed Deposits In Laos

[jpinx]

The original thread on this was archived

It's here......

http://www.thaivisa.com/forum/topic/597261-fixed-deposits-in-laos/

.. but I'm booting it again to see if anyone has recent information on the various Laos banks rates and terms

[Oorinara]

My posts #1760 and 1763 may be of help.

http://www.thaivisa.com/forum/index.php?/topic/560837-Bank-Savings-Interest-Rates

[jpinx]

My posts #1760 and 1763 may be of help.

http://www.thaivisa.com/forum/index.php?/topic/560837-Bank-Savings-Interest-Rates

Thanks

For reference...

http://www.thaivisa.com/forum/topic/560837-bank-savings-interest-rates/page-71#entry9509372

..and a few posts after that..

..

Banks In Laos

http://www.bol.gov.la/english/other_banks.html

and....

Lao Development Bank

http://www.ldblao.la/ldbeng/dep_fixed.php

[Oorinara]

Phongsavanh Bank has a sub branch counter at Vientiane airport terminal (not only for forex but also for general banking services). One can operate bank accounts even without going outside the airport.

http://www.phongsavanhbank.com/psv/modules.php?modules=interest_rates&lg=ENG

[Oorinara]

My friend opened bank accounts with Phongsavanh Bank just recently with passport (non Lao) and hotel address in Vientiane and residential address and mobile phone number in Bangkok. So, essentially, only passport was the documentary requirement, as has been the case with this bank.

http://www.phongsavanhbank.com/psv/modules.php?modules=interest_rates&lg=ENG

[anotheruser]

I emailed ANZ bank and just out of interest they gave me this email back....

Dear Mr xxx xxxx,

Thank you for contacting us. Regarding regal side, I am unable to confirm if it is a requirement by the government. However, according to our internal policies and guidelines, ANZ Lao unable to open any kind of accounts including Fixed Term Deposit for foreigners who does not have stay permit and work permit.

If you have any further query, please do not hesitate to contact us.

Best regards,
ANZ


-----Original Message-----
From: General EnquiryRxxx [mailto:xxxxxxxxxxx@gmail.com]
Sent: Tuesday, 13 October 2015 3:24 PM
To: Laos, Customer Care
Subject: General Enquiry - Laos

Query: Hello,

I would like to know if a Lao work permit or business visa is required legally to open a fixed term deposit account in Laos? Can a foreigner who does not reside in Laos open such an account?

Thank you,

So not even they really know what the deal is. What they do know is they demand a work or stay permit. Stay permits are for spouses that reside in Laos and do not work. There maybe other instances of a stay permit but it usually means that. I am going to guess they have those guidelines in their internal policy because the government told them to. Why else would they care?

Now say you were able to open a fixed term with no work permit at some minor bank. Would you feel secure doing so?

Cute that they don't know the 'regal" side. I tried to mail BCEL but their security capcha didn't let me through even if I typed it right. Their website has always sort of sucked.

[Ban Merry]

My friend opened bank accounts with Phongsavanh Bank just recently with passport (non Lao) and hotel address in Vientiane and residential address and mobile phone number in Bangkok. So, essentially, only passport was the documentary requirement, as has been the case with this bank.
http://www.phongsava...st_rates&lg=ENG

Doubt this has happened as I have 3 bank accounts here with all asking for my work permit and ID stay permit.

[Oorinara]

Documentary requirement varies among banks there in Vientiane, per my experiences.

[Oorinara]

My friends experience on documentary requirements for account opening last week.

- Phongsavanh Bank: passport and entry visa and stamp

- Acleda Lao Bank: passport and its copy authenticated by Lao Ministry of Foreign Affairs (which first requires certification by his/her Consulate General in Vientiane, I suppose)

- BCEL (Kip account for stock trading): passport and endorsement letter from BCEL-KT Securities

[lovelaos]

you're too late.... interest rates are now

LAK USD THB

Current Deposit Account - - -

Saving Deposit Account 1.96% 1.25% 1.00%

Fixed Deposit Account 3 month 3.34% 1.75% 1.50%

Fixed Deposit Account 6 month 4.22% 2.50% 2.25%

Fixed Deposit Account 12 month 6.13% 3.50% 3.25%

Fixed Deposit Account 24 month 8.63% 5.00% 4.25%

Fixed Deposit Account 36 month 9.54% 6.00% 5.75%

Fixed Deposit Account 48 month 10.56% 6.25% 6.00%

Fixed Deposit Account 60 month 11.65% 6.75% 6.50%

[Oorinara]

you're too late.... interest rates are

Which bank?

[lovelaos]

you're too late.... interest rates are

Which bank?

This is BCEL but all banks have been ordered by the government to do the same.

[jpinx]

you're too late.... interest rates are

Which bank?

This is BCEL but all banks have been ordered by the government to do the same.

Does this mean that there is nothing to choose between the various bank rates, only the service provided? Did any of them sort out proper internet banking yet?

[Oorinara]

you're too late.... interest rates are

Which bank?

This is BCEL but all banks have been ordered by the government to do the same.

Acleda Lao Bank and Indochina Bank, for example, show different rates, some part higher and others lower than BCEL. Has the Bank of Lao, central bank, capped interest rates???

http://www.acledabank.com.la/la/eng/ps_defixeddeposit

http://www.indochinabank.com/interest-rate.html

[Oorinara]

Did any of them sort out proper internet banking yet?

As far as I observe, BCEL and Joint Development Bank have Internet banking derive for nominal monthly fees. BCEL also mobile app. Haven't tried yet though.

[TheCruncher]

If you deposit US$ in a Laos bank, how do you get them out of the country at the end of the term?

Do they pay you in US$ or in Lao Kip? Same for Thai baht, do they pay you out in Thai Baht or in Lao Kip?

[Oorinara]

If you deposit US$ in a Laos bank, how do you get them out of the country at the end of the term?

Do they pay you in US$ or in Lao Kip? Same for Thai baht, do they pay you out in Thai Baht or in Lao Kip?

In the same currency, you can withdraw and remit back to Thailand or elsewhere. No forex risk as far as USD and THB are concerned.

[TheCruncher]

If you deposit US$ in a Laos bank, how do you get them out of the country at the end of the term?

Do they pay you in US$ or in Lao Kip? Same for Thai baht, do they pay you out in Thai Baht or in Lao Kip?

In the same currency, you can withdraw and remit back to Thailand or elsewhere. No forex risk as far as USD and THB are concerned.

Thanks and how much liquidity risk is there with Lao banks, because I'm old enough to realize that a free lunch doesn't exist anywhere, so if someone is paying those premiums for foreign currencies there must be a snake in the grass somewhere.

[Oorinara]

Lao is financially underdeveloped, so country risk remains high. Capital control such as capping foreign currency outward remittance is NOT put in place as of now, but you never know. Lao PDR's sovereign rating is BBB+ by TRIS, Thai rating agency.

http://www.trisrating.com/news/press-release/3688-mbk050615.html

Besides, Lao banks are poorly regulated and some may be imprudently managed. Higher return, higher risk.

[TheCruncher]

Lao is financially underdeveloped, so country risk remains high. Capital control such as capping foreign currency outward remittance is NOT put in place as of now, but you never know. Lao PDR's sovereign rating is BBB+ by TRIS, Thai rating agency.

http://www.trisrating.com/news/press-release/3688-mbk050615.html

Besides, Lao banks are poorly regulated and some may be imprudently managed. Higher return, higher risk.

So what is your personal take on depositing a significant amount of foreign currency for an extended period.

[Oorinara]

I find that Bank of Lao PDR, central bank, has capped interest rates of Lao Kip, both deposit and loan, since 3Q 2015.

http://www.bcel.com.la/bcel/bcelweb-datas/file-path/deposit-interest/en/Deposit_Interest_Rate_Notice_20150928_Public_Eng_4.pdf

http://en.vietstock.com.vn/2015/08/commercial-banks-concerned-about-impact-of-lower-interest-rates-58-214103.htm

Foreign currency deposits are not subjected by these regulations seemingly, but may be affected, I'm afraid.

[Oorinara]

Lao is financially underdeveloped, so country risk remains high. Capital control such as capping foreign currency outward remittance is NOT put in place as of now, but you never know. Lao PDR's sovereign rating is BBB+ by TRIS, Thai rating agency.

http://www.trisrating.com/news/press-release/3688-mbk050615.html

Besides, Lao banks are poorly regulated and some may be imprudently managed. Higher return, higher risk.

So what is your personal take on depositing a significant amount of foreign currency for an extended period.

I think proportion of person's financial asset to Lao banks, rather than the amount per se, matter. I have 3-5 years deposit with some of them, but not that big proportion among my asset. Choosing prudent banks, and of course diversifying investment by currency, bank and jurisdiction etc. always may be inevitable.

[jpinx]

Lao is financially underdeveloped, so country risk remains high. Capital control such as capping foreign currency outward remittance is NOT put in place as of now, but you never know. Lao PDR's sovereign rating is BBB+ by TRIS, Thai rating agency.

http://www.trisrating.com/news/press-release/3688-mbk050615.html

Besides, Lao banks are poorly regulated and some may be imprudently managed. Higher return, higher risk.

So what is your personal take on depositing a significant amount of foreign currency for an extended period.

I think proportion of person's financial asset to Lao banks, rather than the amount per se, matter. I have 3-5 years deposit with some of them, but not that big proportion among my asset. Choosing prudent banks, and of course diversifying investment by currency, bank and jurisdiction etc. always may be inevitable.

Given their low minimum investment levels it's probably worth opening a minimum account and see how the wind blows. Possibly do the same in several banks and in other countries - maybe Cambodia. If there is urgent need to park a large sum - representing a significant proportion of one's wealth, a bank with a minimum of an A rating from Standard and Poors would probably be a better idea. Split the funds into several accounts on different terms so that some of it becomes available for you to "play" with in Laos or Cambodia once you know the ropes.

There are members of TV who routinely manage their own investments in banks and in stocks, shares, etc., but they are expert, even if only from long experience. A novice who wants to manage their own fund needs to climb the stairway of experience very carefully.

[DavidMavec]

16% annual interest can still be gotten from EMI for 24 month fixed deposits http://www.emimfi.com/emiweb/ . It's a microfinance institute, not a bank, but the service is good and you do not need a residence permit. Been around for over 10 years and was started with World Bank backing. I've had funds there for over a year and so far so good.

[Oorinara]

16% annual interest can still be gotten from EMI for 24 month fixed deposits http://www.emimfi.com/emiweb/ . It's a microfinance institute, not a bank, but the service is good and you do not need a residence permit. Been around for over 10 years and was started with World Bank backing. I've had funds there for over a year and so far so good.

16% in Kip, Baht or USD, may I know? Anyway, thanks for useful info, David.

[jpinx]

16% annual interest can still be gotten from EMI for 24 month fixed deposits http://www.emimfi.com/emiweb/ . It's a microfinance institute, not a bank, but the service is good and you do not need a residence permit. Been around for over 10 years and was started with World Bank backing. I've had funds there for over a year and so far so good.

That's a nice concept and certainly worth looking into as one of many eggs in your basket, but I'd not stake a large part of my pension fund with them

[Oorinara]

16% annual interest can still be gotten from EMI for 24 month fixed deposits http://www.emimfi.com/emiweb/ . It's a microfinance institute, not a bank, but the service is good and you do not need a residence permit. Been around for over 10 years and was started with World Bank backing. I've had funds there for over a year and so far so good.

16% in Kip, Baht or USD, may I know? Anyway, thanks for useful info, David.

Now I find Lao MFIs accept only Kip. Exchange from Kip to foreign currencies is strictly limited to certain amount per day by regulations. So, it's good if one is prepared to spend most of deposit in local currency there or to go to the informal market.

[Oorinara]

Off topic, but happen to remember that the Lao central bank's regulation limits exchange from Kip to foreign currency up to LAK 20 million (approximately USD 2,450) per day per pax since July 2013, if I'm not mistaken. Banks self regulate and further limit down to LAK 2 million or even less in practice.

[Oorinara]

EMI interest rates (everything in Kip only)

http://www.emimfi.com/

normal saving 8% p.a.

fixed term deposit

- 10% for 6 mo.

- 12% for 1 yr

- 16% for 2 yr (simple interest, so around 13.4% p.a. in compound basis)

Fixed term's Interest payable on normal savings account. Seemingly no interest-upon-maturity product.

[Oorinara]

Newton Microfinance deposit rate (in Kip only)

http://www.newtonmfi.com/

(Website's rate not updated yet)

International Premium Certificate of Deposit

- 9% for 1 yr, 9.5% for 2 yr, 10.5% for 3yr (interest-upon-maturity basis, if monthly interest around 0.5% lower. Simple interest than compound)

Normal savings 3%