Bank Popular??????

santousa · Nov 14, 2003

Hello everyone,
My friend was going to open a bank account con sertificado in Banco Popular,Dominican Republic. First he called 544-5555, ext.00,to ask what would be the persentage. He was told that it would depend on the amount of money deposited in the bank as following:
For November,2003.
300.000-1000.000 pesos 19.5%
less than 300.000 pesos 18%
All these numbers are valid if you want to place money for 1 month. If you place them for two or three months the persentage will be lower.
He was interested in placing 350.000 pesos for one month. He went to the nearest bank office. The people there were very kind,smiling as always but the numbers that they gave to him were different from those he had been given on the phone:
For november,2003
300.000-1000.000 pesos 18%
less than 300.000 pesos 15.5%
Then he went to another office of Banco Popular.To his even more surprise the numbers were even more different:
He was told that if he deposits 350.000 pesos for one month with the sertificate he will have 15.5% in one month.
When he asked the official to present all these information in a written form in a document they refused to do so telling that that it was prohibited.(Noncence!!!!,on my opinion they should place all the information on the board in order anybody who is looking for this information could have access to it) Really my head just refuses to understand what is goinig on in so-called Banco Popular....Maybe its happened because he is not not dominican???
Please, give me some advise what he should do in this situation. Maybe someone here has faced the problems like these before.
Also I have another question regarding if it would be safe to place any money in a Bank in DR. In case of a bankruptcy of the bank what would be the chances of loosing all your money????
Look forward to hearing from anybody who can help.
Thanks

Robert · Nov 14, 2003

Please read the "thousands" of recent posts on this topic.
Use the search function above, it really works well.

Right now is your money safe? No.
Read the recent "Baninter" posts.
Read the DR1 news, become informed.

http://www.dr1.com/news/2003/

Remember, your dealing with DR banks.
This is not the USA, things work a little differently here.

What would I do?

Try and convert my pesos to US$ ASAP!
You might make more on the exchange spread than
the interest in the bank. At least in US$ they will be safe
and not potential Monopoly money.

Ken · Nov 14, 2003

santousa said:
Also I have another question regarding if it would be safe to place any money in a Bank in DR. In case of a bankruptcy of the bank what would be the chances of loosing all your money????

Good chance.

Hillbilly · Nov 15, 2003

Banco Popular

I believe that the Banco Popular would be the last bank in this country to go under. they are the biggest and they are "reasonably" conservative. At least you do not see them going around flashing what they have....

As for the differing percentage rates offered, it could be that different managers have different ceilings. I would be wise to consult the head office in Santo Domingo, where you would want to talk to a higher level manager. Or in Santiago. Branch offices are often very limited as to what they can offer to capture deposits.

Money is guaranteed under laws that are similiar to the FDIC in the US...However, you still have to recognize that this is a "developing" country where things do not always work. However, if Banco Popular goes under, so will the whole island!!!!!!

HB

PhMB · Nov 15, 2003

15.5% per month locura

He was told that if he deposits 350.000 pesos for one month with the sertificate he will have 15.5% in one month.

that should be per year !!! and not in one month !!!

santousa · Nov 15, 2003

santusa

Thanks a lot for everybody!!!!
To the last post my respond would be:
350.000X15.5%/12=for one month.
Thanks

ricktoronto · Nov 15, 2003

Re: santusa

santousa said:
Thanks a lot for everybody!!!!
To the last post my respond would be:
350.000X15.5%/12=for one month.
Thanks

Which is equal to about 1 1/3% per month. The peso has gone down this year , it's hard to tell, but at least 60% (roughly 16 to 40). I left on Tuesday and was getting 37, today it is 39.5, which is a devaluation of nearly 7% in 4 DAYS.

US$ accounts paying 2% per year would beat this.

I don't think I'd hang onto hundreds of 1,000's of pesos right now, since its buying power may go down at 5X the rate that your interest is going up no matter what bank it is.

DRdiving · Nov 16, 2003

I tend to agree with Rick, I think holding US dollars at a lower rate is the way to go. If for no other reason so that you can sleep at night. The personal financial implications of a further degradation of the peso could be disastrous for those that are trying to catch a falling knife right now. The allure of incredible rates of interest only serve to illustrate one point, that the risk is very high. You don't get 30% because they are feeling generous, you get it because it represents risk premium and rates at that level signify extremely high currency risk. Maybe we are at the bottom in the high 30's:1 but I wouldn't bet my wad on it especially in light of the fact that the economic and political underpinnings of the country are fragile at best. I think the best bet would be to dollar cost average into the peso now, maybe x% of your liquidity now, another x% in 60 days etc. Trying to pick the top or bottom is futile and dangerous. And for those that say, "well how much lower can it go", simply look to South America for your answer. An IMF deal will help but remember capital is dynamic and the DR must present an attractive invitation to justify new capital into the country to support and rally the currency. At this point of time, and I am no expert, the climate does not seem to be ripe for picking that bottom.

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Bank Popular??????

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