- Thread starter joseinoa
- Start date
banks in DR
stallion said:
I am curious about this too. It seems there are very few people that can comment on the banks. I have heard some negative comments about some of the cash machines ripping people off but not about the banks themselves.
Does anyone know what current bank cd rates are in the Dominican Republic? I have heard estimates of 20-25 percent for peso accounts but I cannot confirm this.
The things that I have already considered in my risk assesment are:
1) peso devaluation
2) economic risk
3) bank specific risk
4) U.S. taxes
Considering all of these, I think at 25 percent it could still be a good investment. I wouldnt want to keep more than a small amount in any one bank. Maybe a little in each one to limit the bank specific risk.
At 20-25 percent you could literally double your money in four years. Ive been trading stocks enough to know you dont get that kind of guarantee on this planet without taking major risks. Just havent heard any comments from people.
Gringoloco said:
1 or 2 million pesos? No, I wouldnt consider numbers anywhere near that unless that happens to be less than 10 percent of your investment capital.
The DR's largest bank
Banco Popular, is offering 18.5 for a 2MM deposit.
Your biggest risk? Devaluation.
Currently, the pwso is pegging at 28-30, or somewhere in between. Obviously, if you had a bunch of dollars that you exchanged when the dollar hit 54 or so, you could make a major killing by buying back into dollars.
HOwever, If you have pesos, you should know that a lot of the government's projections are based on a 37 to 1 exchange rate, a 25% (or so) difference that is not in your favor. $1000 = 29,000 pesos today. 29,000 pesos with dollar at 37 = $783 (a $217 loss or roughly 20+% loss.)
You had better think this through.
HB
Banco Popular, is offering 18.5 for a 2MM deposit.
Your biggest risk? Devaluation.
Currently, the pwso is pegging at 28-30, or somewhere in between. Obviously, if you had a bunch of dollars that you exchanged when the dollar hit 54 or so, you could make a major killing by buying back into dollars.
HOwever, If you have pesos, you should know that a lot of the government's projections are based on a 37 to 1 exchange rate, a 25% (or so) difference that is not in your favor. $1000 = 29,000 pesos today. 29,000 pesos with dollar at 37 = $783 (a $217 loss or roughly 20+% loss.)
You had better think this through.
HB
Hillbilly said:Banco Popular, is offering 18.5 for a 2MM deposit.
Your biggest risk? Devaluation.
Currently, the pwso is pegging at 28-30, or somewhere in between. Obviously, if you had a bunch of dollars that you exchanged when the dollar hit 54 or so, you could make a major killing by buying back into dollars.
HOwever, If you have pesos, you should know that a lot of the government's projections are based on a 37 to 1 exchange rate, a 25% (or so) difference that is not in your favor. $1000 = 29,000 pesos today. 29,000 pesos with dollar at 37 = $783 (a $217 loss or roughly 20+% loss.)
You had better think this through.
HB
How much are they offering for US$100.000?
Bank rates
Gringo these are the bank rates right from the source. Please have in mind that these rates are negotialbe according to amount of deposit except for Banco Central.
Banco Central is paying 26%. This is the safest I think being that is the Central bank.
Banco Popular is paying 18-22% depending on amount and lenght of time. This is also one of the safest I would say.
Citybank is paying 14% but this rate is negotiable. I would say they would negotiate up to 3 percentage points above their base of 14% depending on amount. Citibank has worlwide offices and reputation and I would think this makes them a little more reputable than local banks, I think.
Banco Hipotecario Dominicano (BHD), I do not know what is their deal. They will not give you a quote over the phone. Its bank policy. If anyone has ever dealt with BHD and has experience with them please post.
On your other items
1) peso devaluation Is stable for now. Econimic indicators and internal
politics point to a stable peso for the time being.
2) economic risk is moderate.
3) bank specific risk. I would assess this is in the following order from safest
to riskiest: Central Bank, Banco Popular, Citybank, BHD
4) U.S. taxes. As a U.S. citizen you are tax globally. It does not matter were you live you must report income. The IRS has provided the following:
If you have your full time residence abroad for a full calendar year, or live there for 330 days out of any consecutive 12 month period, you can exclude up to $80,000 of earned income from U.S. Income Taxation. If you are married, and both of you earn income and reside and work abroad, you can also exclude up to another $80,000 of your spouses income from taxation.
Hope that answers some of your questions.
Gringoloco said:
Gringo these are the bank rates right from the source. Please have in mind that these rates are negotialbe according to amount of deposit except for Banco Central.
Banco Central is paying 26%. This is the safest I think being that is the Central bank.
Banco Popular is paying 18-22% depending on amount and lenght of time. This is also one of the safest I would say.
Citybank is paying 14% but this rate is negotiable. I would say they would negotiate up to 3 percentage points above their base of 14% depending on amount. Citibank has worlwide offices and reputation and I would think this makes them a little more reputable than local banks, I think.
Banco Hipotecario Dominicano (BHD), I do not know what is their deal. They will not give you a quote over the phone. Its bank policy. If anyone has ever dealt with BHD and has experience with them please post.
On your other items
1) peso devaluation Is stable for now. Econimic indicators and internal
politics point to a stable peso for the time being.
2) economic risk is moderate.
3) bank specific risk. I would assess this is in the following order from safest
to riskiest: Central Bank, Banco Popular, Citybank, BHD
4) U.S. taxes. As a U.S. citizen you are tax globally. It does not matter were you live you must report income. The IRS has provided the following:
If you have your full time residence abroad for a full calendar year, or live there for 330 days out of any consecutive 12 month period, you can exclude up to $80,000 of earned income from U.S. Income Taxation. If you are married, and both of you earn income and reside and work abroad, you can also exclude up to another $80,000 of your spouses income from taxation.
Hope that answers some of your questions.
Just a follow up to your answer since the OP's query was regarding interest and they may therefore misinterpret your answer.. as a reminder: Interest earned is passive income and cannot be excluded under the aforementioned U.S. Earned Income exclusion for U.S. Taxpayers working abroad.Riu said:
Just to clarify implications on -----
Your posting above.
You are referring to income earned in the country of residence, I'm sure! Any income earned or originating in the US must be reported and is taxed accordingly without any exclusion rights. only that income earned abroad and fiting the residency requirements may enjoy the exclusion clause mentioned above.
Don't be mislead!!!
Texas Bill
Riu said:
Your posting above.
You are referring to income earned in the country of residence, I'm sure! Any income earned or originating in the US must be reported and is taxed accordingly without any exclusion rights. only that income earned abroad and fiting the residency requirements may enjoy the exclusion clause mentioned above.
Don't be mislead!!!
Texas Bill
Drake said:
It does not matter if its a Canadian bank. It's just as label on the name, but it's run by dominicans just like the other bank's here. If you have a problem with scotia bank, they will not answer your concerns through canada, you will have to deal with the dominicans. So they are the same as the other banks.
banking....
in the D.R. is different. FYI Citibank is at best a franchise in name only. The U.S. banks accept no responsibility for transactions in the D.R. Scocia Bank seems to honor something.
As to currency risk. Near term the peso is being pegged at 35-37 to a dollar as the desired trade rate. Immediate lose of 7 to 9 pesos per. +- 25%. Oops.
Going forward the Great Hippo is threatening to return in '08.
Passive income is taxed aggresively.
PM coming.
in the D.R. is different. FYI Citibank is at best a franchise in name only. The U.S. banks accept no responsibility for transactions in the D.R. Scocia Bank seems to honor something.
As to currency risk. Near term the peso is being pegged at 35-37 to a dollar as the desired trade rate. Immediate lose of 7 to 9 pesos per. +- 25%. Oops.
Going forward the Great Hippo is threatening to return in '08.
Passive income is taxed aggresively.
PM coming.
duhtree said:
Good example of how peso devaluation will eat away at your return on investment.
If you look at the Dominican Peso over the long term it has always devaluated. To overlook this would be a big mistake. But if you can get a better starting point...say like if the peso was currently at 35 to 1 I think you would have a much better starting point.
If the Dominican government is using 35 to 1 figures in their estimates I am certainly not going argue against them. They know the DR alot better thank I do.
Perhaps a good idea is to take a long term (5 to 10 year) average annual devaluation of the peso and subtract that from the annual interest rate to begin with. Then you can figure another 28-29% of the profit for uncle sam if you're in the good ole USA...and you would have a better idea of your long term ROI.
Probably not as rosy as the initial figure but definitely better than other investment options right now. If anyone has a better passive income opportunity I am all ears
and i'm not kidding. There are alot of wise people on these boards.And what about the inflation
I did read most responses and would like to add a few comments :
I'm since years working with the Banco Del Progreso and with the Banco de Reserva and haven't had any problems until now ..Also the US has (Officially ??) a stricter control on DR banks
The banco del Progreso has links with the BBVA one of the biggest banks in Spain and the Banco de Reservas is like the National Bank of the DR
I get good returns on my pesos in certificados and small but still better returns on my USD than I can get in Europe ..
Withiut playing with the USD - Peso rate (bought most of my pesos at 45 pesos ) I don't even keep up with with the yearly inflation ,,Interest 20% inflation around 25% ... That's what is offered today in many countries but they give you simply 2 or 2,5% and inflation is about 2 to 2,5 % ..
So what I try to do is keep the purchasing value of my money .
As I said in another thread to make money you have to loan your money to individuals thru the legal channel and thru the help of a notary ....this can provide you 30% or more on pesos and 12% or more on US$ .. If you have a honest notary there should no high risk being involved ..Recently and seen the present situation demand is more on pesos than on USD.
The peso devaluation is only applicable to foreigners who need other currency . If you live in the country the inflation of the peso is important ..
Devaluation of the peso is manipulated by probably a few extremely wealthy people and the government ...just look what amazing profits some people must have made over the last three years only by changing rapidly and continuously USD into Pesos and the reverse ..Money market is profitable if you have stacks of money in this kind of countries like the DR..
I did read most responses and would like to add a few comments :
I'm since years working with the Banco Del Progreso and with the Banco de Reserva and haven't had any problems until now ..Also the US has (Officially ??) a stricter control on DR banks
The banco del Progreso has links with the BBVA one of the biggest banks in Spain and the Banco de Reservas is like the National Bank of the DR
I get good returns on my pesos in certificados and small but still better returns on my USD than I can get in Europe ..
Withiut playing with the USD - Peso rate (bought most of my pesos at 45 pesos ) I don't even keep up with with the yearly inflation ,,Interest 20% inflation around 25% ... That's what is offered today in many countries but they give you simply 2 or 2,5% and inflation is about 2 to 2,5 % ..
So what I try to do is keep the purchasing value of my money .
As I said in another thread to make money you have to loan your money to individuals thru the legal channel and thru the help of a notary ....this can provide you 30% or more on pesos and 12% or more on US$ .. If you have a honest notary there should no high risk being involved ..Recently and seen the present situation demand is more on pesos than on USD.
The peso devaluation is only applicable to foreigners who need other currency . If you live in the country the inflation of the peso is important ..
Devaluation of the peso is manipulated by probably a few extremely wealthy people and the government ...just look what amazing profits some people must have made over the last three years only by changing rapidly and continuously USD into Pesos and the reverse ..Money market is profitable if you have stacks of money in this kind of countries like the DR..
Gringoloco said:Good example of how peso devaluation will eat away at your return on investment.
If you look at the Dominican Peso over the long term it has always devaluated. To overlook this would be a big mistake. But if you can get a better starting point...say like if the peso was currently at 35 to 1 I think you would have a much better starting point.
If the Dominican government is using 35 to 1 figures in their estimates I am certainly not going argue against them. They know the DR alot better thank I do.
Perhaps a good idea is to take a long term (5 to 10 year) average annual devaluation of the peso and subtract that from the annual interest rate to begin with. Then you can figure another 28-29% of the profit for uncle sam if you're in the good ole USA...and you would have a better idea of your long term ROI.
Probably not as rosy as the initial figure but definitely better than other investment options right now. If anyone has a better passive income opportunity I am all ears
well not exactly passive but...
Real estate in Phoenix is up 25% this year and has been 10%+ since I got here in '98. When I got divorced, I rented a 3 bedroom house from a guy that said him and his wife did not have to work and they only had 4 single family homes rented. Screens his tenants thoroughly and has little problem with the renters. Just my $.02, I am married to a Dominicana and I ain't puttin' my money in any DR bank......and change it to pesos? Fat chance. When she gets here we're buying property here, a few every year until we are self sufficient. YMMV.
-Tim
Real estate in Phoenix is up 25% this year and has been 10%+ since I got here in '98. When I got divorced, I rented a 3 bedroom house from a guy that said him and his wife did not have to work and they only had 4 single family homes rented. Screens his tenants thoroughly and has little problem with the renters. Just my $.02, I am married to a Dominicana and I ain't puttin' my money in any DR bank......and change it to pesos? Fat chance. When she gets here we're buying property here, a few every year until we are self sufficient. YMMV.
-Tim
Are you sure that they are a Canadian Bank? Do you think they don't have to live by Dominican Banking laws even if they were?Drake said: