Govt savings bonds offer best return for the year

That represents the highest rate for savings bonds so far this fiscal year.

The higher rate is in line with the upward trend in domestic interest rates, due mainly to rising inflation.

The bonds will be sold to the public through branches of Bangkok Bank around the country, with the exception of its micro branches. Sales begin on Monday and end on June 25.

The interest, which is subject to 15-per-cent withholding tax, will be paid twice a year, and the bonds will mature three years after the date of sale.

Bangkok Bank led the field recently in raising its savings and lending rates. Late last month, its rates for time deposits were raised 0.125 to a full percentage point and for its lending rate 0.375 of a percentage point. The rate for

24- and 36-month time deposits with Thailand's largest bank by assets became 3.5 per cent per annum.

Thanachart Capital yesterday announced it was nudging up its 12-month time-deposit rate by between 0.50 and a full percentage point and its minimum lending rate by 25 basis points to 7.25 per cent, with immediate effect.

Thanachart's interest rate for 12-month fixed deposits up to Bt1 million is raised from 2.75 per cent to 3.75 per cent, and for bigger amounts from 3.25 per cent to 3.75 per cent.

The ninth batch of savings bonds is part of a 12-lot issue of three-year government savings bonds, each worth Bt500 million. They are issued by the Finance Ministry's Public Debt Management Office. Bangkok Bank is the sole selling agent for all 12 batches.

The interest rate for each batch of bonds is announced two days before the date of sale. It is based on the average yield of three-year government bonds during the five working days prior to it being fixed, and a spread of not more than 15 per cent is added on top of the average rate.

The eighth tranche offered interest of 4 per cent per annum, up from 3.7 per cent for the seventh lot.