Citibank steps up battle for deposits
Citibank took an aggressive tilt at the deposits market yesterday by introducing a range of fixed-deposit accounts with interest rates up to 5 per cent at a time when interest rates generally are believed to have peaked and are heading downwards.
The new accounts are called Citibank Flexible Time Deposits and are fixed-deposit accounts that can be partially withdrawn from ATMs and other channels. Citibank claims the products are the first of their kind in Thailand. Customers can withdraw funds from the new accounts free of charge through normal savings channels, ATMs, Citibank's Internet banking service, Citiphone banking and over the counter. However, the minimum withdrawal is Bt10,000 or multiples of Bt10,000, while the minimum amount needed to open the accounts is Bt200,000. Depositors withdrawing cash before fixed-term maturity will get interest of 1.15 per cent on the withdrawn cash. The account balance will continue to earn the original interest rate until maturity. Customers may withdraw until all their assets, including deposits and mutual funds, fall below Bt100,000. Then the bank will generally charge a fee. The new accounts are available in five choices of three, six, nine, 12 and 18 months. Interest rates are up to 4.75 per cent with a special promotional rate of up to 5 per cent for a six-month term deposit requiring a minimum deposit of Bt2 million. Assunta Christie, Citibank's director of branch sales, liabilities and investments, said the bank was aiming to increase its number of deposit accounts as well as its deposit base. Deposit growth is expected to be in line with the bank's loan-growth target. "Although interest rates are in a downward trend, Citibank is offering the aggressive rates to boost our deposit base and provide benefits for depositors," she said. Citibank believes Thailand's policy signal rate will fall by around 75 to 80 basis points over the next 12 months. Thereafter, bank rates will possibly decrease by 50 to 55 basis points over the next 18 to 20 months. Currently, the savings rate of big local banks stands at 0.75 per cent, while their fixed-deposit rates are around 3.50 per cent to 4.75 per cent. The proportion of savings deposits to time deposits in Thai banks is 70-30, while the ratio in foreign banks is 90-10. However, foreign banks hold only one per cent of total deposits. Assunta said depositors who open the new accounts can withdraw cash from all 15,000 ATMs around the country and about one million ATMs worldwide.
Somruedi Bachongduang The Nation
|
