NEW Bank CD question..

Castro156

Castro156

Member
Oct 9, 2011
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NEW YORK
Thanks Santo! I also comferimed the same.. My concern as you pointed out is the 7 year comitment.. Im looking more for a 3 year lock in at about 15%.. That is my ideal sittuation. I guess the research continues.

I trully appreciate your feedback Santo, if I find anything good I'll send it your way.

Milz...
 
S

santo1

Member
May 1, 2011
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As i found in the past these elections,and who is in power can tip the scales big time ! dont over expose.
 
Squat

Squat

Tropical geek in Las Terrenas
Jan 1, 2002
2,241
169
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santo1 said:
Hi,yes all true ! bhd valores a seperate part of the bhd bank.15% with bhdvalores for 7 years /bhd normal 9% for 1 year & 10% for 2 years.just remember the devaluation rd to the dollar is running at about 2.7% per year at the moment ! and leading up to the election might get worst if pape hipo starts leading the polls with a large margin.The lock in could be a bad move,as i see 20% next year,all these rates are great if you plan on being here for the pesos,if your looking at a quick fix taking dollars back home forget it,I would like to know if any other banks are selling the central banks CDs ???
Click to expand...
Banco Leon does the same...
 
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santo1

Member
May 1, 2011
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There is a time limit to buy these CDs,i think until the goverment bond is all sold,then they issue another at a different rate,different time scale,just like in the past.I did not think it would be just BHD that was given the option only to sell them.The old way at banco central was a 5am nightmare,this new way appears to be better,dont know about the risk factor ?
 
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jaydee427

New member
Dec 21, 2008
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bayaguanaman said:
Banco popular yesterday did mine at a rate of 16%.
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That's a great rate you got there. I just opened a 3 year CD with Scotia Bank at 9% and thought it was a steal. Even with the promise if Hipolito becomes president and the rates go up, mine will be matched.
 
K

kimbjorkland

New member
Apr 6, 2011
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don't over expose people...

I sure hope senior citizens and retirees are not reading this thread thinking they've hit a jackpot...

Some things need to be said - these deposits are all indexed in RD Pesos right?

If you're locking your entire life savings in RD Pesos, and expecting to live off the 15%, keep a few things in mind:


1. inflation last year was published at 8%, so assuming the currency stays the same in 7 years, you're actually in a sinking fund and you're netting let's say 7%/annum.

2. pretty soon your bank here will have to report your income to the IRS, or at least some time in the next 7 years... so if you're at the lower income bracket, you're going to see a 20-30% friction on that 15%, so subtract another 3% at best, you're down to 4%.

3. Now let's look at the currency exchange over the next 7 years. If you'd locked in 3 months ago, you'd have had what? 2/40 = ~5% more? Basically what we're saying is, if the peso goes down in value by another 4%, in 'real' terms, you're breaking even. If it goes down more than 5%, you're losing money.


In short, don't just chase the highest 'IRR', there are other factors at play, and definitely don't over expose!!
 
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frank12

Gold
Sep 6, 2011
11,847
30
48
I agree with Kimbjorkland (Er du Norske eller Svenske?) But i might add that i've been living here off the high interest rates now for over 10 years. If you plan on living here and spending the pesos here, i highly reccomend this way to live. if however, you plan on changing it back to dollars and living outside the country, i'm not sure it would be worth it--although more qualified people here can go into the details about the pros vs cons, which KIMBjorkland covered somewhat.


My family's finance bank has been matching the Central Bank's interest rate for over a decade now and i've had the unique opportunity to live down here as a result of that. the only difference is that my family's bank allows the interest to compound monthly (that can add up quite nicely if you don't collect the interest every month), while the other banks here--Central Bank, Banco Popular, Santo Cruz, BHD, etc. do not allow the interest to compound every month; they deposit your interest into a seperate account.

All in all, it's a good thing if you plan on living here long term.

FRank

kimbjorkland said:
I sure hope senior citizens and retirees are not reading this thread thinking they've hit a jackpot...

Some things need to be said - these deposits are all indexed in RD Pesos right?

If you're locking your entire life savings in RD Pesos, and expecting to live off the 15%, keep a few things in mind:


1. inflation last year was published at 8%, so assuming the currency stays the same in 7 years, you're actually in a sinking fund and you're netting let's say 7%/annum.

2. pretty soon your bank here will have to report your income to the IRS, or at least some time in the next 7 years... so if you're at the lower income bracket, you're going to see a 20-30% friction on that 15%, so subtract another 3% at best, you're down to 4%.

3. Now let's look at the currency exchange over the next 7 years. If you'd locked in 3 months ago, you'd have had what? 2/40 = ~5% more? Basically what we're saying is, if the peso goes down in value by another 4%, in 'real' terms, you're breaking even. If it goes down more than 5%, you're losing money.


In short, don't just chase the highest 'IRR', there are other factors at play, and definitely don't over expose!!
Click to expand...
 
K

kimbjorkland

New member
Apr 6, 2011
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Frank12 - your family has been paying people 15% on their deposits?

Ps my ancestors were Danish, but I'm from the melting pot!
 
F

frank12

Gold
Sep 6, 2011
11,847
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Is your last name Bjorkland and your first name KIm. it's name a common Scandinavian name. i've worked with a lot of Bjorkland's in Norway.

No, my families bank is now paying only 10%, although i haven't checked in some months so, it may have got up slightly. If banco Popular is paying 16%, i would go with that.

Frank

is your family paying people 15% on their deposits?

Ps my ancestors were Danish, but I'm from the melting pot![/QUOTE]
 
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rochy012

New member
Mar 19, 2012
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question about CD

Hey I am looking to invest in a CD in the DR but keeping the money there to support my family.
I was looking at the interest rates but i know they have changed recently.
What is the average rate for 3-7yr CD?

Also if i am a resident in the US but also Dominican citizen, do i need to pay taxes on any money i make if it is not leaving DR? Or should i make the CD in a family member's name so there are no tax liabilities.

I am looking to invest ~50k US and hoping to have the best rate possible.
Considering i am not looking for a way to make money, just support my family there. Normally i send ~$150/week and with 50k i can possibly cover those expenses with a good % CD.

any info/opinions would be great. Thanks
 
SantiagoDR

SantiagoDR

The "REAL" SantiagoDR
Jan 12, 2006
5,817
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With 50k U.S. (Converted to pesos) you could get around $375 U.S. (In pesos) a month with a 9% CD.

Going with a Central Bank CD, buying through say Banco Popular, you might get around 16%.
A rough calculation puts that over $600 U.S. (In pesos)

Have some one in the D.R. check the latest rates at Banco Popular.

As noted, these are CD's in Pesos, CD's in dollars are way lower.



Note: Calculations are estimates only, do your own math.....
 
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rochy012

New member
Mar 19, 2012
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Thanks for the help, but does any one know about the tax implications? Do i need to pay taxes on money earned from this on the US side? or report?

Again, this money is not leaving DR and coming to US.

Thanks
 
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