Thai Regulations Regarding Deposit Interest Rates
The Thai regulations regarding deposit interest rates are mainly set out by the Bank of Thailand. However, financial institutions typically set their own interest rates based on the overall rate environment, part of which is affected by the standard lending rate set out in the Thai Civil and Commercial Code Section 7.
The Bank of Thailand delivers daily commercial bank interest rate updates, including those for fixed deposit accounts. The rates differ based on savings terms, with standard minimum terms being 3, 6, 12, and 24 months.
In addition to the actual interest rates, the Deposit Protection Agency was formed to protect individual interests under the Deposit Protection Agency Act B.E. 2551 (2008). The agency insures up to 1 million baht per person, per institution, as a safeguard in the event of an institution’s financial collapse. The main deposits protected are:
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- Current deposits
- Savings deposits
- Fixed deposits
- Certificate of Deposit
- Deposit receipts
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What Type of Deposit Interest Rate Accounts Exist in Thailand?
The two main types of deposit interest rate accounts in Thailand are savings deposit and fixed deposit accounts. Both accounts offer interest on your cash deposits, with fixed deposit accounts being much higher, though they come with drawbacks.
Commercial banks in The Kingdom typically offer both options to their customers and interest rates also change depending on the bank.
1. Savings Deposit Account
A savings deposit account is a type of bank account where the holder stores their cash in exchange for a small interest rate of return. These accounts typically have no minimum required deposit and any cash contributed can be withdrawn at any time.
This Thai bank account type may be a good choice for those who want to earn some interest on their cash but also need to be able to access it any time.
What Are the Pros and Cons of the Savings Deposit Account?
The pros and cons of the savings deposit account are as follows:
| Pros | Cons |
| Allows access to your money at any time, helpful in times of emergency | Lower interest rates – 0.45-0.55% is considered high as of July 2024 |
| Easy to open with simple procedures | Some banks charge a fee |
| Insured up to 1 million baht | |
| No minimum deposit in many cases |
2. Fixed Deposit Account
A fixed deposit account is a type of bank account where the holder stores their cash for a set period of time in exchange for a larger interest rate of return. Minimum deposits for these accounts vary depending on the bank, but are commonly set at around 1,000 baht for shorter terms and 10,000 baht for long-term (24 month) deposits.
In addition to the larger deposit, the cash in fixed deposit accounts cannot be withdrawn before the agreed-upon term has elapsed without waving a certain amount of the interest payment. The interest deducted depends on the individual bank’s policy.
This account style may be suitable for those with cash that they know they won’t require access to in the immediate future and who want to earn higher interest percentages on their capital.
What Are the Pros and Cons of the Fixed Deposit Account?
The pros and cons of the fixed deposit account are as follows:
| Pros | Cons |
| Higher interest rates with little risk | Interest rate is fixed which may not be a good thing in a rising rate environment |
| Flexible terms from short to longer term periods | Minimum deposit amounts, usually as low as 1,000 baht |
| Insured up to 1 million baht | Penalty for premature withdrawal of funds |
| Can be used as collateral for a loan |
Deposit Rates for Individuals at Commercial Banks
When compared against each other, the deposit rates from highest to lowest for individuals at the top 10 commercial banks in Thailand as of July 12, 2024 line up as follows:
| Bank Name | Regular Savings Rate | 3-month term | 6-month term | 12-month term | 24-month term |
| Krungthai Bank | 0.3% | 1.17% | 1.25% | 1.7% | 2.25% |
| SCB | 0.3% | 1.1% | 1.25% | 1.7% | 2.25% |
| Kasikorn Bank | 0.3% | 1.05-1.1% | 1.2-1.25% | 1.6-1.7% | 2.15-2.25% |
| Tisco Bank | 0.3-2% | 1.7-2% | 1.75-2.05% | 1.85-2.15% | 1.9-2.15% |
| Bank of Audhya | 0.3% | 1.1% | 1.25% | 1.7% | 2.1% |
| Kiatnakin Bank | 0.25% | 1.35-1.5% | 1.5-1.65% | 1.8-1.95% | 1.95-2.1% |
| Bangkok Bank | 0.45-0.55% | 1.2% | 1.25% | 1.6% | 2% |
| CIMB Bank | 0.35% | 1% | 1.2% | 1.6% | 1.9% |
| UOB | 0.35% | 0.9% | 1.1% | 1.55% | 1.7% |
| TMB Bank | 0.125% | 1.05% | 1.15% | 1.55% | 1.7% |
How To Calculate Fixed Deposit Interest Totals?
Fixed deposit interest totals are based on annual payments, calculated using the fraction of holding term days out of a full 365-day year and multiplying it by the principal and interest rate. The full formula for interest calculations is as follows:
(principal) x (interest percentage) x (deposit term days/365) = total interest earned
An example would be a 6-month (180-days) deposit with a 10,000 baht principal at 1.88% annual interest. This would yield the following total interest:
(10,000) x (0.0188) x (180/365) = 92.71 baht
Important Terms Related To Fixed Deposit Interest Rates
The main important terms related to fixed deposit interest rates are as follows:
- Deposit period. This refers to the agreed-upon term that you will store your money in the fixed deposit account. Common deposit periods are 3, 6, 12, and 24 months.
- Annual interest rate. The percentage that’s applied to the principal deposit. This is multiplied by the total deposit term in days divided by a full 365-day year to give you total interest earned.
- Interest payment period. The agreed-upon date where interest payments are made. This occurs after the deposit term has been fulfilled.
- Non-compliance. This generally applies to cases where an individual withdraws their funds before the full term has been reached. Each bank has its own non-compliance policy that details how much of a partial interest payment is made on pre-term withdrawals.
- Timely closure. Refers to closing an account after completing the agreed-upon term.
- Partial withdrawal. In some cases, banks will allow for partial withdrawals, though generally with a cost such as a lower overall interest payment.
Taxation on Deposit Interest Payment
Deposit interest payments in Thailand are subject to either withholding tax or personal income tax. Withholding tax (WHT) is a flat 15% charged against interest payments up to 20,000 baht in a tax year and may be more beneficial for those in a higher income bracket. This option was introduced by the Thai Revenue Department on April 4th, 2019 via notification number 346.
Those earning interest on Thai savings accounts may also opt to include the total earnings in their personal income tax return. The Thai Revenue Department includes interest payments as part of assessable income, which is used to calculate your overall taxable income. For some, this may mean being taxed at a rate lower than the 15% WHT.
Deposit interest accounts are just one of several attractive ways to invest while in the Land of Smiles, another being real estate. For help getting started with property investments, contact PropertySights Real Estate’s licensed experts today.
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