I am considering opening a bank account in the DR (probably north coast) and am also wondering which bank offers the best interest rate for CDs. Is there an internet site to compare banks (Banco Popular, Banco Reservas, BHD, etc)?
What suggestions do you have for this process?
I also realize that investing in a longer term CD pays considerably more interest but then I'm at the mercy of currency valuation. What is the experience of people already holding CDs? I'm thinking short term for now.
I assume my USDollars will be exchanged into RD$ by the bank, right? and
when I get cash for the CD at its maturity I have to take pesos or exchange
for USD at the prevailing rate?
What's the easiest bank to deal with from the US and especially for someone
with limited formal Spanish skills?
If one is a US or EU citizen, I can't see much value in CDs withing the DR. Unless you lost everything in the States anmd you have no credit. All you have to do is check Moodys to see the DR's credit rating (hmmmm)
Nonetheless, I'll save you all the sarcastic comments from the old-timers here and tell you that the Central Bank has the best rates for CDs in Pesos.
Dollar CDs can be taken out at most of the banks like BanReservas, Popular, Leon and BHD. These interest rates are generally not good and are much riskier than a CD with say Citibank or Chase.
Unless you understand how to play the Forex card, why even bother bringing or buying Dollars here? To make .03 is an insult to your Dollars.
If you're concerned about US taxes, then looking for a hiding place in DR is useless, because any U.S. citizen is required by law to report any/all off-shore accounts to the IRS.
I took the liberty of quoting this from something I read on the Internet.
DISCLAIMER: I cannot say whether or not this may apply to the OP or ANY reader, so please consult an expert, such as an international tax attorney.
"What?s Reportable?
There are two separate annual reporting requirements. You must:
? Acknowledge that you have signatory or ?other? authority over one or more foreign accounts each year on Schedule B of your federal income tax return.
? File Form TD F 90-22.1 (the ?foreign bank account reporting? or ?FBAR? form) with the Treasury Department. (This is a simple form and it only takes a few minutes to complete.)
If you don?t comply with these requirements, you could face severe penalties. You could be fined a civil penalty up to US$10,000 for negligent noncompliance and criminal penalties up to five years. You could even get both, for ?willful? noncompliance.
You should also report various ?bank-like? offshore financial relationships.
For instance, several non-U.S.-based ?digital gold? services permit users to make financial transactions over the Internet in gold-backed accounts. While these services clearly aren?t banks, they carry out ?bank-like? functions. For that reason, the safest course is to report such accounts.
I also recommend reporting foreign variable annuities or life insurance contracts as a foreign account. According to U.S. Treasury Department analyst Elizabeth B. Witzgall:
?The position of the Department of the Treasury is that premium payments for insurance policies with cash surrender value or other investment features constitute ?deposits? within the meaning of Form 90-22.1. Therefore, if a life insurance policy is a ?whole life? or other type of policy with investment value, then it is an ?other financial account? subject to reporting.?
Some offshore promoters claim that you don?t need to report the existence of an offshore account if it?s not in your name and/or you don?t have signature authority over it.
Let me set the record straight. If you hold a debit card for your offshore account, and you can use the card to withdraw money, or even have absent signatory authority over the account, then you clearly have ?other authority? over it. And that means you must report it.
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?IF YOU?RE A U. S. CITIZEN YOU HAVE A RELATIONSHIP WITH THE IRS, WHETHER YOU LIKE IT OR NOT.?
Four Non-Reportable Offshore Investments
The reporting rules suggest several possible exceptions:
* Securities purchased directly from an offshore bank. A securities account is a reportable account. But if you purchase securities from an offshore bank, without opening an account, and keep the certificates in your safety deposit box, the reporting requirements don?t appear to be triggered.
* Real estate. Direct ownership of real property (including timeshare arrangements) in a foreign country isn?t a foreign account. But you must report income from your real estate holdings, wherever they?re located.
* Safekeeping arrangements. Valuables purchased outside the United States and placed directly into a non-U.S. private vault don?t appear to trigger the reporting requirements.
* Warehouse receipts and similar instruments. Certificates that represent ownership of a specified quantity of precious metals or other commodity, stored outside the United States, may not be reportable. A certificate should provide for ?allocated? or ?non-fungible? storage qualify. This means you own specific barrels, bars, coins, etc. that aren?t available to meet other claims of the warehouse company. Commodities held in non-allocated, pooled, or fungible form may be reportable.
* Foreign safety deposit box. Neither a safety deposit box in a foreign bank, nor the contents in it, constitutes a foreign bank account. However, if you open an account with the bank to secure the box, it counts toward the US$10,000 reporting threshold." -by Mark Nestmann
