Bank CD's Interest Rate

third

New member
Jun 16, 2012
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I haven't found any information on the forum about the interest rate of CD's in the Dominican Republic. This seems like it could be the easiest way to retire with little money. What interest rate could you expect to recieve from the banks today? How safe is it? Seems like it would be better than risking investment in Real Estate. Anyone with experience?
 

Dmason

Member
Mar 11, 2012
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I have been reading extensively on DR monetary policy such as it is, but it seems they are in earnest attempting to keep a handle on inflation, although this may be an election-related issue. They are back in business with the IMF, whose opinion is that the DR is one of the most stable overall packages in Latin America.What this means I dont know, to me it means I would be comfy with a 1-2 year lock, but no more.

Rates appear to be negotiable depending on bank, manager, location. Perhaps Ricky11 can share with us the location, bank, and manager of this friend's contract, would be helpful. I have an amount I would like to park on a one year lock. Someone said the one year contracts are sold out, however.

Can we have some opinion on the location-dependent aspect of interest rate, and on duration of contracts, etc. ... gracias...
 

bryan1258

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Dec 24, 2007
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So Cavaldom is the institute that administers BC, CDs if I understand this correctly. Private banks, of course, offer their own CDs.
 

sanluisdavid

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May 18, 2012
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You haven't been "searching" too hard. There's lots of info on here. I've been posting monthly investment bulletins on here for the last few months.

Oh, and to clarify things a bit..... You cannot buy Banco Central CD's any more.

The banks have gotten into the CD business. They got tired of missing out on all of that money being paid directly to certificate holders, without getting their share.

Now, you have to go to a bank, and buy "shares" of a larger CD that was previously purchased by that bank.

Interest is paid every six months now.

The mature date of the CD that you're buying shares of dictates how long you wait before you get you interest payment.

So, if you buy shares of a CD that just made it's six month payment, you have to wait six months before you get your interest payment.

If you buy shares in a CD that paid it's interest 2 months before, then you have to "pay" 2 months of interest back to the bank, but then you get your full interest payment in 4 months(or whatever time frame is left on your shares till the next payment)

You don't get a paper "Certificate" any more like you used to get from Banco Central. Now, you join Cevaldom and log in to see the status of your shares.

You seem to know your stuff. What bank would you suggest for someone who wanted to open an account for one of these "certificates" payable in Pesos?
 

Islanddave

Member
Sep 3, 2011
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Last I checked Santo Cruz and Banco Popular were both 16% on a seven year peso account paid every six months
 

arrugala

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Nov 7, 2010
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That was on us currency with substantial cash it has lowered 2 % over the past year and half for santo banco
 

j&t's future

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Mar 6, 2007
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Banco Leon situated in La Sirena, Puerto Plata offering 12.25% for a 7 year CD (CD is 'shared' with Banco Central). Interest is paid 6 monthly, of course the CD is in Pesos.
 

windeguy

Platinum
Jul 10, 2004
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Banco Leon situated in La Sirena, Puerto Plata offering 12.25% for a 7 year CD (CD is 'shared' with Banco Central). Interest is paid 6 monthly, of course the CD is in Pesos.

That is good information. It is very similar with other large banks. If some other location is giving you more than that right now, be very, very careful.
 

Conchman

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Jul 3, 2002
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I think you lose 10 percent in currency conversions (average) so 12 or 13 percent aint that great unless you are expecting a miracle peso appreciation. I have some dollars and put them into fixed securities like bonds and preferred shares with big energy companies and banks in the US and Europe. They can be hard to find and sometimes they recall them before they expire, but they pay 6 to 8 percent interest and are relatively safe, unless we have a major meltdown of course. You may need a broker to find these offers because they come and go pretty quick.
 

j&t's future

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Mar 6, 2007
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Banco Popular situated in Sosua also offering 12% for a 7 year CD (CD is 'shared' with Banco Central). Interest is paid 6 monthly, of course the CD is in Pesos.
 
Oct 13, 2003
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There is a reason they must pay higher interest percentages.. currently classsified as junk DR cert's are...

The approach taken by Conch would be my recommendation for a fairly secure return without a lot or risk.

I would never go for the 7-year CD's esp if you look at the transaction cost if you get-in, get-out in controlled time-box of one year. Over 7-years the depreciation is going to eat almost all your gains corrected for inflation and depriciation... given the current outlook on monetary policy..

In 2003/2004 some interesting deals could be made direct with CB - from the info posted here that is no longer the case :(

Given the no-doubt high comission charged locally are bad deals for those with access to Euro/Dollar/Yuan bonds from reputable companies - water/electric/hydro/food corporate bonds in Euro/US/Yuan are currently your best bet if you want to limit your exposure use your int bank as broker..

Individual purchases would be avilable as of 100K US$, but have a broker looking for them or know your way around town to get access to them - the sweeter deals are usually snapped up pretty quickly
 

Squat

Tropical geek in Las Terrenas
Jan 1, 2002
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Except for someone who already owns a bunch of pesos...
 
Oct 13, 2003
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Except for someone who already owns a bunch of pesos...

This correct up to the point you have no access to Euro/Dollar/Yuan investments

If you do then I would still believe that changing now to foreign currency would protect you better; once the printing of the money to pay off Leon's debts starts in earnest you'll be stuck with pesos who will depriciate and prices that will go up, in effect loosing value even when collecting a 'nice interest'..

But that is just my opinion of course..

As an alternative you could buy land in the DR with your pesos; that should protect you against inflation, while the rent should provide some income...
 

j&t's future

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Mar 6, 2007
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I would never go for the 7-year CD's esp if you look at the transaction cost if you get-in, get-out in controlled time-box of one year. Over 7-years the depreciation is going to eat almost all your gains corrected for inflation and depriciation... given the current outlook on monetary policy..

Who knows what will happen in 7 years? I beleive that if you have a long term CD (4, 5, 6 or 7 year) that pays you say $60,000 RD+ per month, $360,000 RD+ per 6 months, that figure will still be 'healthy' come the end of your CD. I don't think your average working Dominican will see their salary rise from $15,000 RD per month to $50,000 RD +++ in the same period that your CD runs for. The Government surely cannot let their working/middle class be in a position where they can't afford to put a meal on the table.
I appreciate there may still be a 'correction'/depreciation' due for the peso, to what extent NOBODY knows - and in 7 years time, who knows, we could be back to where we started from.
 
Oct 13, 2003
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Just some real world data

The last 7-years the average inflation was 6.5%

However, in 2003 and 2005 the inflation was 27.5% and 55% on consumerprices.

Let's assume a principal of RD$ 1.0 mio

This gives you @ 12% 60K per 6 month payable at the end of the period. This would equate to RD$ 9,400 per month. Provided you get the full amount without commission

Corrected for inflation you get 5.5% - without subtracting the comission!


Currency depriciation can vary by month but the general trend is that the DR peso is loosing value against the worlds currencies

Compare this with the USA where since 1913 avg inflation was 3.14%, last 7-years it was around 2.5% avg.