Several people have alerted us to a “promotion” from Cambodia Asia Bank (CAB). The website reads: “To celebrate Cambodia Asia Bank’s 30th anniversary, we are offering an extra interest rate of 1.25% on top of our previous interest rate. With this special offer, the interest rate for “Step-up 9 Plus+” goes up to 11.15% per annum”.
And a lot of people are like: “Wow, 11.15% interest! That must be the highest in Cambodia!
However, we find this “promotion” extremely misleading. The highest interest rate is ONLY paid in the last (9th) month of the fixed deposit term. All the months before that have a much lower interest rate, e.g. the 5th to 8th month is 6.34%, almost half of the highest rate, and goes down to only 3.85% for the first two months. So what does this mean in terms of payouts? Well, we’ve worked that out for you in the table below, based on a fixed deposit amount of US$10,000.
| Period | Interest (p.a) | PAYOUT |
|---|---|---|
| 1st month | 3.85% | $32.08 |
| 2nd month | 3.85% | $32.08 |
| 3rd month | 4.95% | $41.25 |
| 4th month | 4.95% | $41.25 |
| 5th month | 6.35% | $52,91 |
| 6th month | 6.35% | $52.91 |
| 7th month | 6.35% | $52.91 |
| 8th month | 6.35% | $52.91 |
| 9th months | 11.15% | $92.91 |
| TOTAL PAYOUT: | $451.25 |
The calculation is as follows: 3.85% of $10,000 is $385 per year, divided by the months (12) gives a payout in this particular month of $32.08. This doesn’t take into account the government tax on interest earned, which is 6% for Cambodian residents and 14% for non-residents.
The total comes to $451.21, or in other words, only 4.5%! Mind you, these are the rates including the “special anniversary bonus”, the interest on the normal rate for “Step-up 9 Plus+” is even lower!
Don’t be fooled by CAB’s “special promotion”. There really are much better deals on the market. See our table of fixed deposits with monthly payout. Most rates for a 9-month deposit in US dollars are well above what CAB offers, with Woori Bank leading the way at 6.50% (add 3 months and you’re looking at 7.75% offered by Woori Bank and KB Prasac Bank).