Fixed bank deposit accounts with additional tax deductions

[BobTH]

On two occasions I have seen fixed deposit accounts that have good interest rates but have been told by the banks that these accounts deduct 1.5 times the normal tax. I am a little confused by this, it appears to me that this is some kind of a government stimulus and backed or supported by the government, I could be wrong. My question is: Being a retired single person here with no income source within the country except my interest from banking savings and fixed accounts that are not close to the allowed exempted income deduction of what I think is 150,000 baht per person. I should be able to get back the entire deducted tax even though it is at a higher rate than the normal. When asking the bank officer I was told that the account bearing 2.3% percent interest was actually 1.9% after taxes. But if I can get it all back I still get the 2.3% right? If anyone has taken one of these fixed deposit accounts that withhold additional tax, I would appreciate setting me straight on this matter. I am no investment expert but it appears to me that this is still the best account income for me. Thanks in advance.

[Pib]

By law, a traditional fixed saving account incurs a 15% tax withholding of interest earned. So, yes an account earning 2.3% gross interest would result in approx 1.9% effective interest in your pocket until you filed for refund of that tax withholding.

Each year you can apply for a refund of the past year's 15% tax withholding with your local tax revenue office...2-8 weeks later you have the refund check in hand. I've been doing it for years with my fixed savings accounts which I use for my big money savings and Bt800K in a Thai bank to satisfy retirement extension of stay requirements.

Your local tax office will mostly likely be very helpful and friendly in assisting you to fill out the refund request/tax filing (I know my office here in Bangkok sure is). Normally you apply for the refund Jan - Mar following the tax year...that's when Thai tax returns are filed. Ex: for 2015 you would apply during Jan - Mar 16...but if you apply afterwards there is small late filing penalty of around Bt200.

See this thread for more info: Link

[BobTH]

By law, a traditional fixed saving account incurs a 15% tax withholding of interest earned. So, yes an account earning 2.3% gross interest would result in approx 1.9% effective interest in your pocket until you filed for refund of that tax withholding.

Each year you can apply for a refund of the past year's 15% tax withholding with your local tax revenue office...2-8 weeks later you have the refund check in hand. I've been doing it for years with my fixed savings accounts which I use for my big money savings and Bt800K in a Thai bank to satisfy retirement extension of stay requirements.

Your local tax office will mostly likely be very helpful and friendly in assisting you to fill out the refund request/tax filing (I know my office here in Bangkok sure is). Normally you apply for the refund Jan - Mar following the tax year...that's when Thai tax returns are filed. Ex: for 2015 you would apply during Jan - Mar 16...but if you apply afterwards there is small late filing penalty of around Bt200.

See this thread for more info: Link

Thanks Pib for your reply. I have applied and been refunded for past year tax on interest also. I am confused by why the bank is saying this particular fixed account deducts 1.5 times the normal withholding amount. Why would they say that if it is the normal amount. But the number I posted are the percentages they gave me 2.3% and 1.9%. According to you that is the norm, I will talk to them again to see what they mean by 1.5 times the normal withholding. Two Banks have told me the same thing also, The Bangkok Bank and The Thai Credit Retail Bank.

Thanks again.

[elgordo38]

Unless you hurry I think you will find the 2.5% rate reduced to 1.5% at most major banks. Next stop will be zero percent or a parking fee for your money much like European banks are doing. Big business is expanding buying out their competition or buying back their own stock and they are doing it with your money. The money you are getting little or no interest on. Welcome to the 21st century way of doing business. Ain't that a B

[Pib]

By law, a traditional fixed saving account incurs a 15% tax withholding of interest earned. So, yes an account earning 2.3% gross interest would result in approx 1.9% effective interest in your pocket until you filed for refund of that tax withholding.

Each year you can apply for a refund of the past year's 15% tax withholding with your local tax revenue office...2-8 weeks later you have the refund check in hand. I've been doing it for years with my fixed savings accounts which I use for my big money savings and Bt800K in a Thai bank to satisfy retirement extension of stay requirements.

Your local tax office will mostly likely be very helpful and friendly in assisting you to fill out the refund request/tax filing (I know my office here in Bangkok sure is). Normally you apply for the refund Jan - Mar following the tax year...that's when Thai tax returns are filed. Ex: for 2015 you would apply during Jan - Mar 16...but if you apply afterwards there is small late filing penalty of around Bt200.

See this thread for more info: Link

Thanks Pib for your reply. I have applied and been refunded for past year tax on interest also. I am confused by why the bank is saying this particular fixed account deducts 1.5 times the normal withholding amount. Why would they say that if it is the normal amount. But the number I posted are the percentages they gave me 2.3% and 1.9%. According to you that is the norm, I will talk to them again to see what they mean by 1.5 times the normal withholding. Two Banks have told me the same thing also, The Bangkok Bank and The Thai Credit Retail Bank.

Thanks again.

Probably just a English-Thai miscommunication on the "1.5 times" thing. Some how some confusion occurred when talking the 15% withholding...maybe the bank rep...maybe you.

On fixed accounts the withholding is 15% of gross interest earned. So, if at whatever gross rate you were earning say that earned you Bt1,000 in gross interest...they would deposit Bt1,000 to your account but at the same time withhold Bt150 for tax payment to the govt...when the dust settles you end up with Bt850 net at that point in time. Both the gross interest payment and tax withholding will show on your statement/passbook. Then as discussed, during Jan-Mar of the following year apply at your local tax office for a refund of the Bt150 tax withheld.

[meatboy]

By law, a traditional fixed saving account incurs a 15% tax withholding of interest earned. So, yes an account earning 2.3% gross interest would result in approx 1.9% effective interest in your pocket until you filed for refund of that tax withholding.

Each year you can apply for a refund of the past year's 15% tax withholding with your local tax revenue office...2-8 weeks later you have the refund check in hand. I've been doing it for years with my fixed savings accounts which I use for my big money savings and Bt800K in a Thai bank to satisfy retirement extension of stay requirements.

Your local tax office will mostly likely be very helpful and friendly in assisting you to fill out the refund request/tax filing (I know my office here in Bangkok sure is). Normally you apply for the refund Jan - Mar following the tax year...that's when Thai tax returns are filed. Ex: for 2015 you would apply during Jan - Mar 16...but if you apply afterwards there is small late filing penalty of around Bt200.

See this thread for more info: Link

Thanks Pib for your reply. I have applied and been refunded for past year tax on interest also. I am confused by why the bank is saying this particular fixed account deducts 1.5 times the normal withholding amount. Why would they say that if it is the normal amount. But the number I posted are the percentages they gave me 2.3% and 1.9%. According to you that is the norm, I will talk to them again to see what they mean by 1.5 times the normal withholding. Two Banks have told me the same thing also, The Bangkok Bank and The Thai Credit Retail Bank.

Thanks again.

Probably just a English-Thai miscommunication on the "1.5 times" thing. Some how some confusion occurred when talking the 15% withholding...maybe the bank rep...maybe you.

On fixed accounts the withholding is 15% of gross interest earned. So, if at whatever gross rate you were earning say that earned you Bt1,000 in gross interest...they would deposit Bt1,000 to your account but at the same time withhold Bt150 for tax payment to the govt...when the dust settles you end up with Bt850 net at that point in time. Both the gross interest payment and tax withholding will show on your statement/passbook. Then as discussed, during Jan-Mar of the following year apply at your local tax office for a refund of the Bt150 tax withheld.

i also does the same as PIB,me and the wife have had our fair share of fixed term accs.most with 15% tax withheld but we do get it all back.

if you shop around you can get some decent rates,mostly from the smaller banks,eg.we have been with land and house the past 4yrs,this year the wife got some good interest rates at thai credit bank,mostly over 2yrs.and 3yrs.

with land and house a long term acc.fixed you can get the interest paid monthly,and they give you the tax withheld certificates at the end of the year if the acc.doesnt mature till later.

[bangmai]

CIMB is doing a 2.15% for 1 year for those 55+...they told me a farang could do it, I haven't verified it....

[meatboy]

CIMB is doing a 2.15% for 1 year for those 55+...they told me a farang could do it, I haven't verified it....

they told me i had to have a work permit,i told them i am retirered,in that case we want your uk.address,i told them ???? ??.the mall korat.

[topt]

CIMB is doing a 2.15% for 1 year for those 55+...they told me a farang could do it, I haven't verified it....

they told me i had to have a work permit,i told them i am retirered,in that case we want your uk.address,i told them ???? ??.the mall korat.

I got this last time some funds matured. So even though I already had an account open they would not open up a new rate in the same book without following a printed off list of requirements - which included UK address supposedly had to be notarised or certified in some way...............

[Pib]

Every time a fixed account has matured for me and I just roll it over to a new fixed account Bangkok Bank does all the same paperwork as if I had never been their customer/had several accounts with them. Seems the wheel is always completely reinvented....each new account opening is like you are a brand new customer.

[bangmai]

CIMB is doing a 2.15% for 1 year for those 55+...they told me a farang could do it, I haven't verified it....

they told me i had to have a work permit,i told them i am retirered,in that case we want your uk.address,i told them ???? ??.the mall korat.

I got this last time some funds matured. So even though I already had an account open they would not open up a new rate in the same book without following a printed off list of requirements - which included UK address supposedly had to be notarised or certified in some way...............

I got FDs without WP...I'm not yet 55, so couldn't verify that. US Citizen, so now just have to fill out IRS forms. Their speed savings pays 1.8% if you have 1 million+....Krungsri's savings is fairly tough to beat....but I got 3.2 x 13 month at CIMB earlier this year...TMB says WP required....haven't tried showing them my Yellow Book, but I didn't like their attitude.

[meatboy]

CIMB is doing a 2.15% for 1 year for those 55+...they told me a farang could do it, I haven't verified it....

they told me i had to have a work permit,i told them i am retirered,in that case we want your uk.address,i told them ???? ??.the mall korat.

I got this last time some funds matured. So even though I already had an account open they would not open up a new rate in the same book without following a printed off list of requirements - which included UK address supposedly had to be notarised or certified in some way...............

i have had fixed accs,with bkk bank,scb,LH.TGSB,and still not one has asked me for a WP.and definately not a uk.address.

so not to be out smarted by a cimb.bird brain i said no problem i only have SAM LAHN BHT.

Edited November 18, 2015 by meatboy

[bangmai]

New rules went into effect about a year ago...more anti=money laundering stuff. Rollovers are easy at BKK Bank, and very profitable for them, because if you sign up for a 5, 7, or 10 month promo rate, what it renews to will be about half of what the competition is offering. That's why you want to go in there the day it matures and get another promo, or get ready to take it elsewhere.

[scooterboy]

Every time a fixed account has matured for me and I just roll it over to a new fixed account Bangkok Bank does all the same paperwork as if I had never been their customer/had several accounts with them. Seems the wheel is always completely reinvented....each new account opening is like you are a brand new customer.

Yes - it's exactly the same for me at GSB, as though I'd never been a customer (for some years, too!) at their bank. Passport copies, tabien baan, the wife's ID card (If applicable) and literally tons of forms, papers and copies to sign.

I often wonder what they actually do with all the paperwork they produce, for it seems that if you later have a question about your account, they can rarely find the original documents......

Still, it's very much the same at the Immigration Offices and probably at other Thai government offices, too ......

[Pib]

Last week my Bangkok Bank 11 month, 2.8% fixed account matured...it automatically roles over into a 3 month fixed account paying 1%. A few days ago I went to possibly roll it over into whatever their best fixed account promotion was like I had been doing for 3 or so years now, but I knew going that unless they had something significantly better that their current 1.625% 7 or 11 month fixed account promotion I would just close that fixed account and move the money temporarily to my regular Bangkok Bank savings account for easy withdrawal purposes. Then I would just move it to my Krungsri Bank Mee Tai Dai account paying 1.8% which comes with debit card and no 15% tax withholding unless you exceed Bt20K interest per year which means no tax refund filing each year.

When the dust settled Bangkok Bank didn't have anything better than their 1.625% fixed account promotion, I closed the account, and will soon put the money in my Krungsri Mee Tai Dai account...maybe even open another one. I'll use that Krungsri account to store my Bt800K+ which I use for income proof for my yearly retirement extension of stay and emergency/need big money today account. Plus, I can withdrawal money from the Mee Tai Dai account without any interest penalty like a fixed account incurs if pulling money before it matures.

Yeap, this is the first year that Bangkok Bank did not have any fixed savings account that I thought was competitive enough. Interest rates sure ain't what they use to be compared to even a year ago. Maybe I'll just let my money set in a Krungsri Mee Tai Dai account for all of next year/2016 and have no need to file for any refund of interest tax withholding. Time will tell.

[BobTH]

Last week my Bangkok Bank 11 month, 2.8% fixed account matured...it automatically roles over into a 3 month fixed account paying 1%. A few days ago I went to possibly roll it over into whatever their best fixed account promotion was like I had been doing for 3 or so years now, but I knew going that unless they had something significantly better that their current 1.625% 7 or 11 month fixed account promotion I would just close that fixed account and move the money temporarily to my regular Bangkok Bank savings account for easy withdrawal purposes. Then I would just move it to my Krungsri Bank Mee Tai Dai account paying 1.8% which comes with debit card and no 15% tax withholding unless you exceed Bt20K interest per year which means no tax refund filing each year.

When the dust settled Bangkok Bank didn't have anything better than their 1.625% fixed account promotion, I closed the account, and will soon put the money in my Krungsri Mee Tai Dai account...maybe even open another one. I'll use that Krungsri account to store my Bt800K+ which I use for income proof for my yearly retirement extension of stay and emergency/need big money today account. Plus, I can withdrawal money from the Mee Tai Dai account without any interest penalty like a fixed account incurs if pulling money before it matures.

Yeap, this is the first year that Bangkok Bank did not have any fixed savings account that I thought was competitive enough. Interest rates sure ain't what they use to be compared to even a year ago. Maybe I'll just let my money set in a Krungsri Mee Tai Dai account for all of next year/2016 and have no need to file for any refund of interest tax withholding. Time will tell.

Pib, I am not sure you are referring to the same account as I opened at the Krungsri Bank that you refer to as the Mee Tai Dai account, but I did just open a special regular saving account (100,000 baht) there paying 1.8% on October 29th. On the application I requested a debit card which they told me I could not get, I am not sure why. It wasn't really important to me so I didn't really question it. The bank is about a two minute walk from my apartment and besides, I do not plan to touch that account and was primarily opening it just to establish myself with another bank besides SCB and Bangkok Bank. They also mentioned that the account came with two free withdrawals per month, and after that there was a fee per withdrawal. You might want to ask about that also if you open the account and it is of concern to you. I might add I opened the account with my Thai drivers license and passport for my I.D.. I do not have a work permit or yellow book and am on a retirement extension also.

[bangmai]

I have a Mae Ta Dee, and no debit card....I don't recall if it was offered, so I can't clarify that for you. Overall that may be the best account to have...especially in the lower interest rate environment. We'll see if the 1.8% will continue...I have seen some slight upticks in rates, elsewhere, after a rapid decline.

[Pib]

Last week my Bangkok Bank 11 month, 2.8% fixed account matured...it automatically roles over into a 3 month fixed account paying 1%. A few days ago I went to possibly roll it over into whatever their best fixed account promotion was like I had been doing for 3 or so years now, but I knew going that unless they had something significantly better that their current 1.625% 7 or 11 month fixed account promotion I would just close that fixed account and move the money temporarily to my regular Bangkok Bank savings account for easy withdrawal purposes. Then I would just move it to my Krungsri Bank Mee Tai Dai account paying 1.8% which comes with debit card and no 15% tax withholding unless you exceed Bt20K interest per year which means no tax refund filing each year.

When the dust settled Bangkok Bank didn't have anything better than their 1.625% fixed account promotion, I closed the account, and will soon put the money in my Krungsri Mee Tai Dai account...maybe even open another one. I'll use that Krungsri account to store my Bt800K+ which I use for income proof for my yearly retirement extension of stay and emergency/need big money today account. Plus, I can withdrawal money from the Mee Tai Dai account without any interest penalty like a fixed account incurs if pulling money before it matures.

Yeap, this is the first year that Bangkok Bank did not have any fixed savings account that I thought was competitive enough. Interest rates sure ain't what they use to be compared to even a year ago. Maybe I'll just let my money set in a Krungsri Mee Tai Dai account for all of next year/2016 and have no need to file for any refund of interest tax withholding. Time will tell.

Pib, I am not sure you are referring to the same account as I opened at the Krungsri Bank that you refer to as the Mee Tai Dai account, but I did just open a special regular saving account (100,000 baht) there paying 1.8% on October 29th. On the application I requested a debit card which they told me I could not get, I am not sure why. It wasn't really important to me so I didn't really question it. The bank is about a two minute walk from my apartment and besides, I do not plan to touch that account and was primarily opening it just to establish myself with another bank besides SCB and Bangkok Bank. They also mentioned that the account came with two free withdrawals per month, and after that there was a fee per withdrawal. You might want to ask about that also if you open the account and it is of concern to you. I might add I opened the account with my Thai drivers license and passport for my I.D.. I do not have a work permit or yellow book and am on a retirement extension also.

Sure sounds like you opened a Mee Tai Dai account as that's the only one paying 1.8% at this time per their latest interest rate sheet dated 13 Nov. Go to this Krungsri page for more info on their Mee Tai Dai account. They have fewer details on their webpage now about the Mee Tai Dai account than around a year ago when I opened my account. When I opened mine the webpage said you could make up to two withdrawals per month fee free but for the 3rd and subsequent withdrawals that month there would be a Bt50 fee for each withdrawal via teller, ATM, online transfer, etc. Maybe it's still that way but their webpage just don't give that level of detail anymore right up front.

And I had no problem getting a debit card with that Mee Tai Dai account....I wanted the cheapest card annual fee wise. At that time they pulled out a debit card flyer in English that listed around 6 debit cards I could get...some were pricy that came with accident insurance but I chose their No Annual Fee card...and there was no fee of initial issuance of the card. But you do automatically get signed up for Krungsri SMS service at Bt19/month with this card....same thing happens with some of their other debit cards. See this Krungsri webpage for the card I got. I use it maybe on an average of once a month to draw some cash from the Mee Tai Dai account...never been a fee of any kind because I never exceeded the two free withdrawals per month allowed with the Mee Tai Dai account. Now the Bt50 fee referred to on the debit card page appears to deal with if you drop below Bt15K in whatever account you have the card linked to...I don't think it's the fee I was referring to regarding the Bt50 fee associated with the Mee Tai Dai account if you make more than two withdrawals via ATM, teller, online transfer, etc., per month.

Edited November 19, 2015 by Pib

[bangmai]

but if the lowest priced card isn't chip protected, that would be penny wise and pound foolish.

[Pib]

but if the lowest priced card isn't chip protected, that would be penny wise and pound foolish.

I don't see where any of Krungsri's debit cards are chipped protected yet from looking at their web page that shows all their debit cards. I guess I better go close my account at Krungsri account and/or destroy my non-chipped card---NOT!

Krungsri Debit Cards

https://www.krungsri.com/bank/en/PersonalBanking/DepositProducts/KrungsriDebitcard.html

[Pib]

@BobTH,

Went and pulled out my Terms of Agreement on the Mee Tae Dai account I opened Sep 14 and then two statements are quoted to address a withdrawal fee if doing more than two withdrawals per month. Krungsri's can also provide Terms and Agreements in English (at least they did for me) and they are in pretty good English...not perfect...but pretty good. This type of account that currently paying a high 1.8% interest compared to a normal savings account paying around 0.5% is not meant to be one that you use for many withdrawal transactions per month. It's geared towards being a true savings account....that's why they pay the higher interest...it almost like a high interest paying fixed savings account but without the withdrawal penalty of loosing most of the interest if withdrawing before maturity. And like earlier mentioned it now paying more than Bangkok Bank's fixed account promotions.

Quote:

6. The depositors shall be able to make the Withdrawal Transaction 2 times each month with free of charge, after that, the Withdrawal Transaction fee will be charged in the amount of 50 baht per transaction given that such fee will be deducted from the account in the next day.

7. Withdrawal Transaction means any withdrawal or fund transfer via all of the bank's channels which also include automatic account account deduction and the closing of account.

End Quote.

And that no initial/annual fee debit card I have requires a $15K opening and average monthly balance to avoid a Bt50 fee. Since it's linked to my Mee Tae Dai account where I keep big money that $15K average monthly balance is not an issue.

[Pib]

Here's a Krungsri link and snapshot of the withdrawal fee structure on the Mee Tae Dai savings account talking about withdrawal fees...first two each month free...3rd and up each month Bt50. It's basically an abbreviated version of the more detailed Terms & Agreement doc I got last year when opening the account.

https://www.krungsri.com/bank/getmedia/05c06d57-1390-49ea-aa3a-d3efd62a9951/Fees-New-01062012.aspx