Interest rates // How to calculate

[Charlie1]

It's annoying me since a long time and the uneducated clerks in the banks cannot answer my question:

Many banks announce some promotions like 1,5 % for 15 months etc.

What I am interested in, is to know how much I get per annum (per year) and I never get an answer.

It's a big difference if you get 1,5% on an annual basis during 15 months (Example 1) versus getting 1,5 % on your money after 15 months (making it 1% per month, thus 1,2 % per year)(Example 2).

Example 1: 10,000 Baht at 1,5% on an annual basis for 15 months is: 10,000 x 1,5 /100/12 x 15 = 187,5 Baht which means effectively 1,5 % per annum

Example 2: 10,000 Baht at 1,5 % for 15 months is: 10,000 x 1,5 / 100 = 150 Baht which means effectively 1,2 % per annum

I guess the right answer is rather example 2 and they're just luring the people with the higher figure (1,5 % looks better than the 1,2 % which it actually really is)

Any experts here? Thanks!!

[alfieconn]

I think your find that the 1.5% is per annum and therefore example 1 is correct.

 

 

Edited April 23, 2017 by alfieconn

[topt]

Agree with the Op that it is very difficult to get a clear answer sometimes from bank staff especially on "stepped" products. Unfortunately they do not seem to use a standard agreed measurement like the APR figure which is mandated for example in the UK.

 

Normally they show you a printed example and you have to work it out yourself. When in doubt just walk away

[alfieconn]

7 minutes ago, topt said:

Agree with the Op that it is very difficult to get a clear answer sometimes from bank staff especially on "stepped" products. Unfortunately they do not seem to use a standard agreed measurement like the APR figure which is mandated for example in the UK.

 

Normally they show you a printed example and you have to work it out yourself. When in doubt just walk away

On  fixed deposits i'm sure they do !

Edited April 23, 2017 by alfieconn

[KhonKaenKowboy]

I don't recall seeing a case of anything but the APR being posted.  Take the payments monthly, and you will get interest on interest in the account it is deposited in...I had a 13 month and she showed me to the THB what it would be worth at maturity.  In that case 3.1%/12*13*principle.  Regular savings accounts can be calculated monthly, with varying number f days...that can be a little more complex...depending on number of days in the month and what day of the week the month starts and finishes.  Bangkok Bank only pays twice per year.  TBH, you seem to be the uneducated one.

Edited April 23, 2017 by KhonKaenKowboy

[55Jay]

Ex 1 looks right.  Checked it on this handy simple interest calculator.   

 

You want to calculate the interest on $10000 at 1.5% interest per year after 15 month(s). The formula we'll use for this is the simple interest formula, or:   I= P x R x T

 

http://www.webmath.com/simpinterest.html

Edited April 23, 2017 by 55Jay
Change link. Equation answer did not save and display

[alfieconn]

15 minutes ago, 55Jay said:

Ex 1 looks right.  Checked it on this handy simple interest calculator.   

 

You want to calculate the interest on $10000 at 1.5% interest per year after 15 month(s). The formula we'll use for this is the simple interest formula, or:   I= P x R x T

 

http://www.webmath.com/simpinterest.html

Think formula that's incorrect old bean.

 

Edited April 23, 2017 by alfieconn

[55Jay]

9 minutes ago, alfieconn said:

Think formula that's incorrect old bean.

 

 The calculator came up with the same figures as OP's Ex 1, albeit in Dollars.

 

2 hours ago, alfieconn said:

I think your find that the 1.5% is per annum and therefore example 1 is correct.

 

Edited April 23, 2017 by 55Jay

[55Jay]

Here comes Pib!!! 

[Charlie1]

2 hours ago, KhonKaenKowboy said:

I don't recall seeing a case of anything but the APR being posted.  Take the payments monthly, and you will get interest on interest in the account it is deposited in...I had a 13 month and she showed me to the THB what it would be worth at maturity.  In that case 3.1%/12*13*principle.  Regular savings accounts can be calculated monthly, with varying number f days...that can be a little more complex...depending on number of days in the month and what day of the week the month starts and finishes.  Bangkok Bank only pays twice per year.  TBH, you seem to be the uneducated one.

As English is only my third language (out of 4 languages spoken and written), can you as a very educated person please explain the abbreviation "APR" to me?

[scubascuba3]

Offering it for 15 months just confuses things. Either way 1.5% is low

[KhonKaenKowboy]

1 minute ago, scubascuba3 said:

Offering it for 15 months just confuses things. Either way 1.5% is low

Compared to what?

[55Jay]

I've only done 1 time deposit here (with BKK Bank).  As interest rates began falling a few years ago, the prospect of chasing promotion balloons around town at different banks for 0.x% more interest was unappealing, so I said screw it, and dumped what I had onshore into a few Krungsi Mee Tae Dai accounts.  Was at 2.5% back then but of course, followed the rest down; now at 1.3% I believe.  IMO and circumstance, the effort required chasing balloons, dealing with the "you can not open" nonsense with random bank employees, and filing Thai Tax Returns for the bank interest, just wasn't worth the aggravation.

[KhonKaenKowboy]

1 minute ago, 55Jay said:

I've only done 1 time deposit here (with BKK Bank).  As interest rates began falling a few years ago, the prospect of chasing promotion balloons around town at different banks for 0.x% more interest was unappealing, so I said screw it, and dumped what I had onshore into a few Krungsi Mee Tae Dai accounts.  Was at 2.5% back then but of course, followed the rest down; now at 1.3% I believe.  IMO and circumstance, the effort required chasing balloons, dealing with the "you can not open" nonsense with random bank employees, and filing Thai Tax Returns for the bank interest, just wasn't worth the aggravation.

That is probably the simplest solution and the branch at Airport Plaza CM is good (long waits sometime).  However, CIMB pays 1.5% with no taxes and gives you free ATM to use nationwide without fee, as well as 5000+ in ASEAN and Airport lounge privileges.  Up to you, but the more we make them compete, the better it will be.  I see people paying stupid credit card fees here...with a fraction of protection and bonuses I get in the US.

[55Jay]

1 minute ago, KhonKaenKowboy said:

That is probably the simplest solution and the branch at Airport Plaza CM is good (long waits sometime).  However, CIMB pays 1.5% with no taxes and gives you free ATM to use nationwide without fee, as well as 5000+ in ASEAN and Airport lounge privileges.  Up to you, but the more we make them compete, the better it will be.  I see people paying stupid credit card fees here...with a fraction of protection and bonuses I get in the US.

Roger that, thanks.  I heard about CIMB on TVF a while back and, always keen on banking back up plans, Mrs and I visited the mall branch.  Got the "can not" response straight away.   Non-O/extension status bounced off the pretty mannequin's head.

 

Persistence pays off, I know, been there done that a number of times with success, but in this case, decided a nice lunch was more appealing. 

 

 

 

[alfieconn]

2 hours ago, alfieconn said:

Think formula that's incorrect old bean.

 

Sorry my mistake, didn't realize they were putting the term as a decimal.

[alfieconn]

1 hour ago, scubascuba3 said:

Offering it for 15 months just confuses things. Either way 1.5% is low

[KhonKaenKowboy]

52 minutes ago, 55Jay said:

Roger that, thanks.  I heard about CIMB on TVF a while back and, always keen on banking back up plans, Mrs and I visited the mall branch.  Got the "can not" response straight away.   Non-O/extension status bounced off the pretty mannequin's head.

 

Persistence pays off, I know, been there done that a number of times with success, but in this case, decided a nice lunch was more appealing. 

 

 

 

I did mine with retirement extension and Yellow book....no WP which is what TMB told me.  I think what they mean is they are too <deleted> lazy to do the nine pages of forms the US gov requires of them...and their English is weak....no doubt.  PM me and I can give you specifics for CM if you want.  The ATM deal is sweet.  TBH I like the manager better next door at YellowBank.....nothing is forever, especially here....and the BKK Bank account is a keeper too.  Amazing how many fools put the 800k in large banks at one third the interest.  Even in this low rate environment that is still a brand new Sony or nice refrigerator every year difference.  Holding people to a lower standard is pure bigotry in my opinion.  The financial institutions will earn my respect and business.

[55Jay]

7 minutes ago, KhonKaenKowboy said:

I did mine with retirement extension and Yellow book....no WP which is what TMB told me.  I think what they mean is they are too <deleted> lazy to do the nine pages of forms the US gov requires of them...and their English is weak....no doubt.  PM me and I can give you specifics for CM if you want.  The ATM deal is sweet.  TBH I like the manager better next door at YellowBank.....nothing is forever, especially here....and the BKK Bank account is a keeper too.  Amazing how many fools put the 800k in large banks at one third the interest.  Even in this low rate environment that is still a brand new Sony or nice refrigerator every year difference.  Holding people to a lower standard is pure bigotry in my opinion.  The financial institutions will earn my respect and business.

We are on the same page in general, but I've moved past holding their feet to the fire on principal.  I'm set, things running smoothly, so I opt for as little contact with government servants and bank employees as possible.  .2% not enough motivation to wade in again, but will keep CIMB on the short list if a change is needed or prudent.

 

Day to day working accounts are with Bangkok Bank ala the magic New York branch ~ a keeper indeed.

[KhonKaenKowboy]

On a good day, some of them are sexy as Hell, other times it can seem like they are in training to be rude French waiters or worse; Immigration workers.  I am glad that hallway is safe enough to walk across with a sack of money, and thankfully we do have choices in banking.  Their reliance on fees has really changed their style.  One would think they could make a lot charging 7% and paying 1.5%...but it is always back to the ten page fee booklet.

[scubascuba3]

Compared to what?

Inflation is around 1.5% so you are just about breaking even. Personally i invest in Funds. There are lots of options.

[KhonKaenKowboy]

2 minutes ago, scubascuba3 said:

Inflation is around 1.5% so you are just about breaking even. Personally i invest in Funds. There are lots of options.

Real Estate and Financials lost 3/4 their value during the crash.....but Immigration says you need 800k guaranteed by the government.  So 1.5% short term, compared to G7 countries is not terrible.  I wouldn't feel better in the Euro or Pound now, or even the Dollar.  I like FNMIX.

[scubascuba3]

Real Estate and Financials lost 3/4 their value during the crash.....but Immigration says you need 800k guaranteed by the government.  So 1.5% short term, compared to G7 countries is not terrible.  I wouldn't feel better in the Euro or Pound now, or even the Dollar.  I like FNMIX.

Its hard to get excited about 1.5% when pretty much everything else is up loads.

 

 

 

[KhonKaenKowboy]

Might as well compare it to horse racing...it is apples and oranges.  I made 5% on Yum China...in about two hours.  Not guaranteed and won't get you an extension, though...and they don't deliver to CM, or even give you an ATM card.

[Gumballl]

7 hours ago, Charlie1 said:

As English is only my third language (out of 4 languages spoken and written), can you as a very educated person please explain the abbreviation "APR" to me?

APR = Annual Percentage Rate

 

The term is also used in the USA.

[scubascuba3]

Might as well compare it to horse racing...it is apples and oranges.  I made 5% on Yum China...in about two hours.  Not guaranteed and won't get you an extension, though...and they don't deliver to CM, or even give you an ATM card.

Stocks&Shares vs Horse racing, yes good comparison