curious too jack how this one ends , i was told ( long time ago) that opening a foreign currency account was not advisable due to the high costs charged by the banks on those accounts ?.....

Also confirmed at Udon Immigration today that foreign currency accounts (FCA) are OK.

However, after further investigation, I am now not sure that I will bother to go down that path.

It really comes down to betting on movements of the US$ against the Baht during the next few years, during which time I will be running down the account for living expenses.

That needs to be measured against the interest rates being offered for FCA and TBH accounts. The two banks in Ban Dung who will open an FCA both pay less than 1% on a 12 month term deposit, whereas 3% is available for a similar TBH account.



ps kop - the charges to open and maintain an FCA are quite low. It was 1% at one bank, and 0.25% at the other. Neither charged for withdrawals or transfers, so long as they were in TBH, and at the same bank.

Thanks for the update JS,the credit interest rate does not help them

800k 12 month term deposit matured at Kbank on weekend and am trying to decide what to do for next 12 months.
Rate last year was 2.3%. This year the rate is down to 1.6% according to bank branch or 1.7% on their web page.

Foreign Currency Deposit Rate for AUD on Kbanks web page advertises 3.25% for 12 months.

Does anyone out there now have a FCA account, preferably AUD because for some reason the rate is higher, and do they work ok?
I have bank accounts at Kbank, Krungthai and Bangkok bank and don’t really care which one I use.

..... before depositing any money in a foreign currency account you need to think seriously about what the exchange rate risk of that currency may be against the THB over the next 12 months.

While the interest rate may be lower for the THB, the potential loss from a downside exchange rate movement is eliminated – as is the potential gain from an upside exchange rate movement.

The BoT has reduced its interest rate by 0.5% over the last year and indicated a couple of weeks ago that it is prepared to lower its interest rate further, which explains the lower rate currently being offered by Kasikorn.

The AUD is currently at a 4 year low and (in my opinion) prospects for its recovery from its current low are not particularly rosy as the economic prospects for its commodity dependent economy in the short term are not looking good and, as such, it would need the RBA to increase its interest rate quite markedly relative to other currencies for some kind of a recovery in the AUD to occur.

While increasing the interest rate could bolster the AUD in the short term it would only be a temporary respite, without changes to its current economic and political trajectory I have serious doubts about its longer term sustainability.

However, one also needs to consider the Thailand side of the equation; in 12 months time how might changes in the Thai economy and in BoT monetary policy affect the relative value of the Baht against the currency of an FCA that you choose?

Looking into the future on the impact of exchange rate movements can probably best be summed up (in the words of Donald Rumsfeld) as:

... there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know

Rolling over the 800,000 Baht deposit will guarantee that in 12 months time there will be 800,000 Baht there (plus interest, albeit at a reduced level) - an FCA when converted back into Baht in 12 months time (even with a higher level of interest) cannot guarantee 800,000 Baht.

Thanks for that information Jimbo. It's a good point you make about
Forex rates but one that is hard to do much about. The aud/tbt
exchange rate has been pretty good for a few years now and I happily
keep enough baht here to live on for 12 months or so.

As it turns out I did open a Foreign Currency account today but very
much doubt I'll ever use it.

Here's how it worked out (I really mean didn't work out):
My branch of Kbank in Posri Road sent me to what they called their
international branch, also in Posri Road but near Makro. They inturn
wanted to send me back to my branch? Persuaded them to ring my branch
which they did. They, my branch, said sorry, you'll have to go Kbank
Central Plaza.

The customer service man in Central Plaza that opened the account
could speak very little english. He then directed me to someone else,
who's english was fair, to answer my questions.
Unfortunately they had opened an FCA Savings Account, 2.35%, and I
really wanted a 12 month Term Deposit account, 3.25%.

My original intention was to, over a period of time, use the 800k held
for my visa extension for living expenses. It's currently in a 6
months term deposit earning 1.35% pa, less 15% of the interest gained
for Gov't tax.
I would then replace the 800K with money from Aust but into the FCA account.

The FCA savings account opened today is worse than useless. It will
earn, on todays rates, 2.35%. Costs are 1% for deposits, 1% for
withdrawals plus the 15% tax on interest earned.
On a one year deposit of aud $100 that equates to costs of $1 in + $1
out +15% of $2.35 or $0.3525.
That totals $2.35 fees on interest earned of $2.35.

Maybe that's how they work out the interest rates?
As well there would be international funds transfer fees at both ends.

The FCA term deposit seemed a little better at 3.25% pa and as I left
the bank I was thinking I still may consider that when I next have a
substantial amount of AUD.
Thinking about it again now I am sure that the bank would want to
charge the 1% deposit and 1% withdrawal every year when the term
deposit matured and they re-deposited for me. Probably explains why 1
year was the longest FCA term deposit.

Looks like I have to be content with the normal branch term deposits
or bring less money to Thailand and try the income based system for
visa extensions.

Another TIT lesson learned.