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					                                   Investment between Commercial Bank and Life Insurance   1



                     Investment between
  Commercial Bank and Life Insurance
Commercial Bank
        A commercial bank is a type of financial intermediary and a type of bank. This
is what people normally call a "bank". The term "commercial" was used to distinguish
it from an investment bank. Since the two types of banks no longer have to be
separate companies, some have used the term "commercial bank" to refer to banks
which focus mainly on companies. commercial banks only engage in banking
activities (accepting deposits and making loans, as well as other fee based services),
whereas investment banks were limited to capital markets activities. This separation
is no longer mandatory.

      It raises funds by collecting deposits from businesses and consumers via
checkable deposits, savings deposits, and time (or term) deposits. It makes loans to
businesses and consumers. It also buys corporate bonds and government bonds. Its
primary liabilities are deposits and primary assets are loans and bonds.

       In Thailand, commercial banks belong to Bank of Thailand (BOI) that belongs
to Ministry of finance (MOF).

Banking Services (Deposit and Loan)
      Banking service                personal          SMEs           big business

   Deposit

Saving deposit account                                                    

Fixed deposit account                                                     

Current deposit account                                                   

Foreign currency deposit account                                          

   Loan

Housing loan                             

Personal loan                                            

Corporate loan                                                              

SMEs loan                                                




                             Kullaya Kanchoochut 48540330
                                                 Investment between Commercial Bank and Life Insurance                  2



Deposits
Saving deposit account : You can deposit and withdraw money everyday,
unlimited time and more amounts with account books receive more interests.

Fixed deposit account : You can choose period of time (3 months, 6 months, 12
months and 24 months) for deposit money, receives high interests as period of time
that you choose.

Current deposit account : You can order to deposit or withdraw money by
cheques, appropriate for businessmen who want active money. It’s safety to
expenditure because you don’t carry a lot of cash. You can audit your account from
statements.

Foreign currency deposit account : It’s services of bank to make convenience for
foreigner, exporter, importer and foreign borrower. You can deposit foreign currency
immediately so It’s decreasing risk of exchange rate.

Interest rate
Saving deposit account : Interest is calculated from credit of everyday.

Fixed deposit account               :     Interest is calculated follows interest rate when it’s
expired.

                                     Saving                            Fixed deposit account
       Commercial Bank              deposit
                                    account           3 months        6 months         12 months       24 months

 Bangkok Bank                           0.7500          2.2500          2.2500            2.3750          2.5000

 Krung Thai Bank                        0.7500      2.0000 - 2.2500 2.0000 - 2.2500       2.2500          2.5000

 Kasikorn Bank                          0.7500      2.0000 - 2.2500 2.0000 - 2.2500       2.2500          2.5000

 Siam Commercial Bank                   0.7500      2.0000 - 2.2500 2.0000 - 2.2500       2.3750          2.5000

 Bank of Ayudhya                        0.7500      2.0000 - 2.2500 2.0000 - 2.2500 2.2500 - 2.3750       2.5000

 Thai Military Bank               0.7500 - 2.5000       2.2500          2.2500        2.2500 - 3.0000 2.5000 - 3.1250

 Siam City Bank                   0.7500 - 1.5000       2.2500          2.2500            2.5000          2.5000

 UOB                                    0.7500      2.2500 - 2.5000 2.2500 - 2.5000 2.2500 - 2.5000       2.7500

 Bank Thai                        1.0000 - 1.5000 2.2500 - 2.5000 2.2500 - 2.5000 2.2500 - 2.5000         2.5000

 Standard Chartered Bank (Thai)   0.5000 - 3.0000 2.0000 - 2.5000 2.0000 - 2.5000 2.0000 - 2.5000 2.0000 - 2.5000

 Thanachart Bank                  2.0000 - 2.2000 2.2500 - 2.3750 2.2500 - 2.3750 2.5000 - 2.6250            -



How the commercial banks do with our money?
      Commercial Bank changes deposits from customers come to be loan for
borrowers. It’s a revolving economy.


                                        Kullaya Kanchoochut 48540330
                                      Investment between Commercial Bank and Life Insurance   3



Rewards
Saving deposit account : Bank pay interest semiannually.

Fixed deposit account : When It’s expired, bank will give principle and compound
interest money.

Advantage
1. It’s the way to save your money.

2. You receive rewards that are interests from deposit money.

3. It’s a short-term investment.

4. Safety for money

Disadvantage
1. You receive rewards less than life insurance (long-term investment).

2. Interest rate and reward are not stable. It’s depending on economy.




Life Insurance
       Life insurance or life assurance is a contract between the policy owner and
the insurer, where the insurer agrees to pay a sum of money upon the occurrence of
the policy owner's death. In return, the policy owner (or policy payer) agrees to pay a
stipulated amount called a premium at regular intervals.

       As with most insurance policies, life assurance is a contract between the
insurer and the policy owner (policyholder) whereby a benefit is paid to the
designated Beneficiary (or Beneficiaries) if an insured event occurs which is covered
by the policy. To be a life policy the insured event must be based upon life (or lives)
of the people named in the policy. Insured events that may be covered include death
and accidental death.

       In Thailand, Life insurance companies belong to Department of insurance
(DOI) that belong to Ministry of commerce (MOC).

Services of Life Insurance
      Ordinary life insurance
      Industrial life insurance
      Group life insurance




                               Kullaya Kanchoochut 48540330
                                    Investment between Commercial Bank and Life Insurance   4


Insurance policy has 4 types are

      Term life insurance
      Whole life insurance
      Endowment life insurance
      Annuity life insurance

Insurance premiums
Term life insurance : It preserves in short-term, the insured pays the least
insurance premium.

Whole life insurance : the insured can pay insurance premium in 3 types that are
pay once, pay whole life, pay in term.

Endowment life insurance        :   It combines between preserving life and saving
money.

Annuity life insurance : The insured can choose period of time to pay insurance
premiums.

Dividends
     Each company doesn’t give same dividend. And it’s a secret of each
company. But any dividend rates from life insurance are more than interest rate from
commercial bank.

How the life insurance do with our money?
       Life insurance companies will take insurance premiums to buying debentures,
government bonds, making funds for loan and investing in shares. Average of
dividend rate of each company is 4% per year (in 2007).

Rewards (Benefits)
Term life insurance : companies will give much benefit if the insured is death in
time of contract.

Whole life insurance : companies will give benefit if the insured is death in time of
contract or in 99 years.

Endowment life insurance : companies will give benefit (and dividend) in time of
contract.

Annuity life insurance : companies will give benefit to insured every month after
the insured is retired or the insured is 55 or 60 years old until contract is expired or
the insured is death such as a pension.




                             Kullaya Kanchoochut 48540330
                                      Investment between Commercial Bank and Life Insurance   5



Advantage
1. It’s the way to save your money.

2. It preserve the insured (medical fee, lose organs, senescence, death).

3. It’s a long-term investment.

4. Family of insured has warranty and it relieves the public welfare.

5. The insured receives rewards (money) certainly.

Disadvantage
1. The insured must wait for reward until contract is expired (except endowment life
insurance)

2. Dividend money is not stable. Each company is not same. It’ll change follows economy.




Calculation for comparing
Formula : Equal-Payment-Series Compound-Amount (F/A)

     Uses to calculate final amount you‘ll receive from deposition with bank
compares with final amount you’ll receive from life insurance in same the annuity and
same amount of years.

Formula : Equal-Payment-Series Sinking-Fund (A/F)

      Uses to calculate the annuity you’ll pay for deposits with bank and insurance
premiums with life insurance company at the same reward (final amount).



Summary
       Investment has high risk. You should choose the best way to invest. If you
have money without using and want a long-term investment, investing with
endowment life insurance (similar to deposition) is may be a good alternative.
Because life insurance company gives reward more than deposition with commercial
bank. Interest from bank depends on economy at that time. Nevertheless, deposition
with commercial bank is necessary for business processing.




                              Kullaya Kanchoochut 48540330
                                     Investment between Commercial Bank and Life Insurance   6



References
http://en.wikipedia.org/wiki/Commercial_bank

http://en.wikipedia.org/wiki/Life_insurance

http://bangtai.blogspot.com/

https://www.thanachartbank.co.th

http://www.doi.go.th/l/index.html

http://www.thanachartlife.co.th/

http://www.marketathome.com/shop/show_article.php?shopid=6057&qid=8872

http://www.bot.or.th

http://www.insuredd.com/index.asp




                               Kullaya Kanchoochut 48540330

				
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