The Bank for Agriculture and Agricultural Cooperatives (BAAC) also launched a 16-month deposit product with an average interest rate of 3.4 per cent to raise Bt55 billion.
The minimum deposit is Bt50,000.
Arun Lertvilai, executive vice president of the BAAC, said the interest rate would be stepped up, starting at 3.15 per cent from now to November. Then it will rise to 3.25 per cent from December-March, 3.25 per cent from April-July and 4 per cent from August-November.
Individual depositors are also exempted from the 10-per-cent withholding tax.
Early withdrawals will draw a penalty of 1 per cent of the amount withdrawn, except when the depositor dies. Each withdrawal must be at least Bt500.
The bank’s deposit base of Bt888.13 billion includes Bt482.98 billion in savings accounts, Bt2.51 billion in current accounts and Bt97.56 billion in fixed-deposit accounts.
Premium savings certificates account for Bt124.55 billion and special savings products Bt180.53 billion.
Chakkrit Parapuntakul, director-general of the Public Debt Management Office, said he welcomed banks issuing alternative investment products to attract savers, as government bonds worth Bt206 billion reached maturity yesterday.
The government savings bonds will also provide an investment opportunity for those who held these bonds, he said.
The first day of sales of the six-year savings bonds through the branches and automated teller machines of four commercial banks was likely not lively, as the interest rate of 3.99 per cent might not be attractive.
The new bonds were reserved for the elderly yesterday and today before opening for the public from tomorrow to September 14.
The minimum purchase is Bt1,000 and the maximum Bt2 million.
Weidt Nuchjalearn, a senior executive vice president at Krung Thai Bank, said the bank sold Bt1.5 billion of the six-year bonds in the first day. The interest rate is not that attractive but should match up with the preference of senior citizens for conservative investments.
The bank expects to sell at least Bt20 billion worth of the six-year bonds.
“We might have an advantage over other underwriters as we are a state-owned bank. Most elderly people prefer buying the government bonds at state-owned banks,” he said.
Besides KTB, Bangkok Bank, Kasi-kornbank and Siam Commercial Bank are underwriters.