Shift to long-term accounts
Savers have started to shift their funds from short- to long-term deposit accounts amid market expectation that the central bank's policy rate has peaked or will do so soon.
Thitinan Wattanavekin, head of treasury and funding at Kiatnakin Bank, said yesterday that since June, her bank's depositors had paid more attention to longer-term fixed accounts, particularly those over one year. The migration to longer maturities is based on the assumption that the country's policy rate will stabilise soon. The bank will next week launch a fixed-deposit account called the "Kiatnakin 9 plus 9". The 18-month account will pay interest of 5.4 per cent for the first nine months, and 5.6 per cent for next nine months. She believes that the bank's nine-month special rate offering will likely be the highest in the banking industry. The market rate is now about 5 per cent. As a small bank, Kiatnakin attract funds by offering higher deposit rates - from 25 to 50 basis points more than those quoted by large banks. "We hope to receive new deposits of Bt500 million to Bt1 billion from the package. Both the bank's existing customers and other banks' customers are expected to be interested in this new package," Thitinan said. Praves Suttirat, executive vice president of Siam Commercial Bank (SCB), said that to be competitive, smaller banks should keep their deposit rates at 50 basis points above the rates set by large banks. Siam Commercial Bank boosted deposits by Bt40 billion in the first half, almost to its full-year growth target of Bt50 billion, but it failed to attract business for its 100th anniversary promotion that ended last month. The deposit goal for the special nine-month account paying 5 per cent was Bt80 billion to Bt90 billion, but only 60 per cent of that was raised. Somruedi Banchongduang The Nation
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