fixed term deposit question....

wolfcreek · Post by **wolfcreek** » Fri Jun 19, 2020 8:39 pm

On a 24 (or 36) month fixed term deposit is the tax taken out of the interest at the end of each year, or is it only taken out at the very end (the maturity date)? Anyone know?

Pizzalover · Post by **Pizzalover** » Fri Jun 19, 2020 10:57 pm

If you do a deposit of more than 12 months, go for monthly interest withdrawal. Your tax is withheld from each monthly payment.

If you go for payment at the end of the term (24/36 months), you wont get any compound interest. In other words, you will get considerably less interest as compared to monthly withdrawal. Tax will be withheld at the end of the term when you will receive your single interest payment together with your principal.

All MFIs and banks are very quiet about this and their websites are mildly misleading.

phuketrichard · Post by **phuketrichard** » Sat Jun 20, 2020 7:49 am

why 24/36?
Prasac pays the same interest on 12/24/36
7.75%

https://www.prasac.com.kh/en/services/d ... it-account

Lonestar · Post by **Lonestar** » Sat Jun 20, 2020 8:02 am

Pizzalover,

I have always done 12 month fixed deposits with an automatic rollover of the principal and interest into a new 12 month deposit. So that interest should be compounding. Am I missing something?

Kammekor · Post by **Kammekor** » Sat Jun 20, 2020 8:09 am

wolfcreek wrote: ↑Fri Jun 19, 2020 8:39 pm On a 24 (or 36) month fixed term deposit is the tax taken out of the interest at the end of each year, or is it only taken out at the very end (the maturity date)? Anyone know?

Once a year. They won't allow you to make money with money belonging to the Competent Authorities.

wolfcreek · Post by **wolfcreek** » Sat Jun 20, 2020 10:21 am

Pizzalover wrote: ↑Fri Jun 19, 2020 10:57 pm If you do a deposit of more than 12 months, go for monthly interest withdrawal. Your tax is withheld from each monthly payment.

If you go for payment at the end of the term (24/36 months), you wont get any compound interest. In other words, you will get considerably less interest as compared to monthly withdrawal. Tax will be withheld at the end of the term when you will receive your single interest payment together with your principal.

All MFIs and banks are very quiet about this and their websites are mildly misleading.

Pizzalover, do you know this for a fact? If so, how much difference does it make if the MFI isn't compounding the interest? Thanks...

Kammekor · Post by **Kammekor** » Sat Jun 20, 2020 10:52 am

Pizzalover wrote: ↑Fri Jun 19, 2020 10:57 pm If you do a deposit of more than 12 months, go for monthly interest withdrawal. Your tax is withheld from each monthly payment.

If you go for payment at the end of the term (24/36 months), you wont get any compound interest. In other words, you will get considerably less interest as compared to monthly withdrawal. Tax will be withheld at the end of the term when you will receive your single interest payment together with your principal.

All MFIs and banks are very quiet about this and their websites are mildly misleading.

Monthly interest payments have lower interest rate than yearly payments. Usually about 0.5%.

atst · Post by **atst** » Sat Jun 20, 2020 8:37 pm

Most term deposit in Cambodia that are longer than 12 months you miss out on the compounding interest but most longer terms have higher rates

Cooldude · Post by **Cooldude** » Sat Jun 20, 2020 8:50 pm

I took a 36 with Prasac 3 years ago at 8.4% interest and assumed it would be compounded annually. I already figured the interest. When the girl came out and have me my certificate, the interest was a bit less than I had figured. When I asked her about it she said they use simple interest. Ok, my fault for assuming. The 8.4% interest conveniently worked out to 8% interest over 3 years. If you think rates are going to stay the same for years to come, it's better to do annual certificates and roll over the principal and interest on an annual basis as some people have already recommended.

fixed term deposit question....

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