More banks have joined the fixed-deposit account fray in the last few weeks, which is giving savers more options for places to stow their money and earn returns that are well above typical savings account rates.

The packages launched by banks in their dash to build up larger deposit bases can be classified into two groups. The first is characterised by accounts that pay interest on a monthly, quarterly or semi-annual basis, while the other group boasts tax-free advantages.

The banks that pay interest on a monthly basis are attractive in the sense that investors do not have to wait very long to see returns. Also, the formula used to calculate interest payments is clear and simple.

Among banks that pay interest on a monthly basis, Thanachart Bank offers the highest rate of return. The small bank pays an annualised rate of 5.25 per cent for its fixed nine-month account, which requires a minimum deposit of Bt100,000. This offer started last Friday.

Thanachart's special deposit rate is slightly higher and the maturity one month shorter than a similar package at Bangkok Bank, the country's largest financial institution.

Last week TMB Bank launched another account to celebrate the Songkran festival, an eight-month offer that pays an annualised rate of 5 per cent. It pays interest on a monthly basis and the minimum deposit is Bt500,000.

If the minimum deposit for these two accounts is too lofty, savers have many choices at banks, including another option at TMB. Kasikornbank (Kbank), TMB, and Siam City Bank (SCIB) have set minimum deposits of only Bt1,000 for their fixed-deposit accounts.

These three banks are paying an annual interest rate of 4.5 per cent, but their maturity lengths vary. Kbank and TMB set their deposit periods at eight months, while SCIB set it at seven months.

For savers who don't want to park their money for too long, there are also shorter packages with attractive deposit rates.

The Government Housing Bank offers a fixed six-month deposit account with an interest rate of 4.5 per cent, also payable monthly. The state-owned bank requires a minimum deposit of Bt10,000.

AIG Finance (Thailand), a newcomer to the Kingdom's banking sector, offers an annual rate of 5 per cent for its fixed 15-month deposit, which requires a minimum deposit of Bt50,000. Account holders are paid interest every three months.

Bank of Ayudhya offers a 15-month deposit account with varying fixed interest rates. Depositors that stash their money into its accounts for between one and six months will be paid an annualised rate of 4.5 per cent, while depositors who put their money in for seven to 12 months will receive 4.75 per cent (annualised).

Those who keep their money in the account for between 13 and 18 months will be paid an annual rate of 5 per cent. The minimum deposit is Bt50,000.

Bangkok Bank pays an annualised rate of 5.125 per cent for its fixed 10-month deposit account, which it launched last month. It too requires a minimum deposit of Bt100,000. The period to plunk down money into the fixed-deposit account started on March 31 and ends April 30. Interest is paid only once - at the end of the 10 months.

Some banks are offering time deposits with maturities long enough to qualify for tax waivers. Normally, all savers with deposit returns are subject to a withholding tax of 15 per cent of total return. But earlier, the government - in an effort to promote household savings - offered to waive taxes on interest payments for savers who park their money for more than two years.

Thanachart offers an annual rate of 4.75, while Krung Thai Bank (KTB) provides returns of 4.5 per cent for such longer-term tax-free deposit accounts that last 24 months. Thanachart's minimum deposit is Bt1,000 and KTB's Bt25,000.

The Bank for Agriculture and Agricultural Cooperatives, another state-owned bank, pays an annual interest rate of 4.25 per cent for its fixed six-month deposit, which also qualifies for tax waivers. The minimum deposit is Bt50,000.

It has managed to gain tax-free status by requiring customers to continue depositing money into the account on a monthly basis in amounts equal to the first month's deposit.

Moreover, depositors must not fail to make a deposit for more than two months. If they cannot follow the conditions throughout the six months, the rate will fall or they could be subjected to extra fees.

Somruedi Banchongduang

The Nation