BoT: Thai deposits woefully meagre

BoT: Thai deposits woefully meagre

According to Bank of Thailand research, savings accounts are far more popular than fixed deposits.
According to Bank of Thailand research, savings accounts are far more popular than fixed deposits.

One-third of Thai depositors have a deposit balance below 500 baht, while the combined deposits of the largest 10% of depositors account for 93% of commercial banks' total deposits, says the Bank of Thailand's think tank.

This means a high concentration of deposits and low savings for many Thais, according to the Puey Ungphakorn Institute for Economic Research (Pier).

Savings accounts are ubiquitous in the country, as half of the Thai population have deposit accounts at commercial banks, but 50% of them have a balance below 3,124 baht and one-third have a balance below 500 baht. Some 0.2% have deposits of more than 10 million, said Atchana Lamsam, head of networking and communications for Pier.

The findings come from a statistical analysis of information from the Deposit Protection Agency (DPA) as of June 2017.

There were 37.9 million depositors who parked money in 80.2 million commercial bank deposit accounts, totalling 12 trillion baht, or 72% of the country's total deposits.

The top 10% of depositors had their money concentrated in big cities, including Bangkok and vicinity, Chon Buri, Chiang Mai, Nakhon Ratchasima and Songkhla, she said.

According to a breakdown by sex, females had more deposit accounts than males, and their deposit amounts were double that of the opposite sex.

This indicates that women have better financial discipline or management skills, and they play an important role in managing household money, Ms Atchana said.

The study found 88% of depositors put money in savings accounts, which yield lower returns than fixed deposit accounts. Depositors preferred depositing money at large commercial banks.

Moreover, half of depositors had only one account.

Savings accounts were the most popular among people from all walks of life, with 93.3% of depositors' portfolio being allocated there, while 6.3% were in fixed deposits.

The study also found that fixed deposit accounts were popular among retirees.

Those living in Greater Bangkok had the highest number of deposit accounts, while those in the South had the least, Ms Atchana said.

Those residing in the Northeast had the lowest amount of deposits in accounts.

She said one finding from the study is Thais' savings behaviour is worrisome, given the high concentration in deposits among the wealthy and low savings and deposit amounts in accounts that offer low returns.

A policy to encourage savings should focus on awareness and understanding of the importance of savings, not just promoting access to deposit services, Ms Atchana said.

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