Six-month fixed deposit accounts have enjoyed a boom in popularity this year, Bank of Thailand (BOT) data showed yesterday.

At the end of February, deposits in six-month accounts totalled Bt546.9 billion, up 75 per cent on the same period last year, according to the data.

The figure far exceeded the 10-per-cent growth recorded by banks for total savings.

Six-month deposits account for 8.5 per cent of total savings while regular accounts represent 42 per cent.

Bank accounts have become increasingly popular with top-level savers. In the first two months of the year, the total value of accounts containing in excess of Bt500 million each grew 260 per cent on the same period last year.

One-year fixed deposits have also grown in popularity, with their total value rising to Bt529.4 billion at the end of February, up 36 per cent on the same period last year.

About 68 per cent of the increase came from the growth in the value of major accounts worth in excess of Bt500 million each.

The value of three-month fixed deposits rose 17 per cent to Bt1.7 trillion. These account for 27 per cent of the total value of savings accounts, the largest share of any of the fixed-term options.

The shift into cash deposits is mostly due to people expecting interest rates to continue to rise, based on the fact that the BOT policy rate has edged up steadily since August 2004.

Depositors moved cash from low-yield regular accounts to high-yielding fixed deposits to earn better rates.

However, the value of fixed-deposit accounts with a longer than two-year term contracted nearly 6 per cent from last year to Bt403.6 billion.Regular savings accounts fell slightly by 0.4 per cent to Bt2.7 trillion.

The trend was most pronounced among high-income savers holding accounts containing more than Bt200 million.

The BOT believes the Bt73-billion sale of Shin Corp to Singapore's Temasek contributed to these trends at commercial banks.

On the size of cash deposits, the BOT found the total value of accounts holding between Bt200,000 and Bt500,000 each had risen by 37 per cent to Bt362.4 billion at the end of February.

The total value of accounts containing more than Bt500 million each rose 28 per cent to Bt651 billion.

Anoma Srisukkasem

The Nation