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Thread: Investing Pesos in a CD...MONEY TALK

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    Lightbulb Investing Pesos in a CD...MONEY TALK

    I have a question for those who invest at Dominican banks or have extensive knowledge of the subject.

    I previously read this at Dominican Republic Banks Banking | Investments | Offshore Business | Retirement Accounts | News Articles and Information | Legal Services

    "Should it be appropriate for you, investing in time deposits denominated in the local currency, the Dominican Peso, could offer yields up to 20% for a bank CD"

    Is this true? And if so, maybe I am still misunderstanding...

    So to be clear, when I move to DR, I can take say, $5,000 US and convert it into Pesos, invest that in a bank CD and yield the equivalent of $1000 U.S. (%20) in Pesos yearly?

    Is that right? That seems to good to be true!

    OH! And also, do any of these banks also offer DAILY compounding interest on these investments?
    Last edited by torreylee; 03-14-2010 at 03:17 PM. Reason: Added the Daily compounding interest question.

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    Quote Originally Posted by torreylee View Post
    Is that right? That seems to good to be true!
    At one point, you could have gotten paid a lot more than 20% during the Hipo regime. A two year Central Bank CD currently pays 9%. (Keep in mind you have potential currency fluctuation risk in RD pesos, which could eat up some/all of your principle.)

    John Schroder really needs to update his website every ten years or so!
    Last edited by Tamborista; 03-14-2010 at 03:28 PM.

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    Quote Originally Posted by Tamborista View Post
    At one point, you could have gotten paid a lot more than 20% during the Hipo regime. A two year Central Bank CD currently pays 9%. (Keep in mind you have potential currency fluctuation risk in RD pesos, which could eat up some/all of your principle.)

    John Schroder really needs to update his website every ten years or so!
    Oh, I understand now. I didn't realize how old that was, lol. That 9% CD, is that in U.S. Currency? And what about 90 day CD's in U.S. Currency? Do you all invest a bit?

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    Quote Originally Posted by Tamborista View Post
    At one point, you could have gotten paid a lot more than 20% during the Hipo regime. A two year Central Bank CD currently pays 9%. (Keep in mind you have potential currency fluctuation risk in RD pesos, which could eat up some/all of your principle.)

    John Schroder really needs to update his website every ten years or so!
    Other than currency volatility-other factors to be weary of in 3rd world countries, is high inflation, sometimes unstable financial institutions with internal theft, government corruption. These are some of the factors that help leading ratings firms like Fitch, Sand P, Moodys etc. to determine a Countries investment grade risk. Only few in Latin America have achieved this distinction and the DR is far from one of them.

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    Are good rates being offered for U.S. Dollars in savings or money market accounts?

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    Quote Originally Posted by torreylee View Post
    Are good rates being offered for U.S. Dollars in savings or money market accounts?
    You should be able to find 1% in a bank.
    As Windeguy suggested, you can find higher rates, but there is risk involved.
    Last edited by Tamborista; 03-20-2010 at 05:00 PM.

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    Quote Originally Posted by Tamborista View Post
    You should be able to find 1% in a bank.
    As Windeguy suggested, you can find higher rates, but there is risk involved.
    1% ? awww heck naw, I guess my money will stay in my U.S. money market account at 1.29%, its not much but its something.....

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    Quote Originally Posted by torreylee View Post
    1% ? awww heck naw, I guess my money will stay in my U.S. money market account at 1.29%, its not much but its something.....
    I sent you a few riskier scenarios.

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    DOP has been really stable against the Dollar since Valdez Albizu took over the Central Bank. I would take the risks with smaller amounts at first (changing $US to DOP I mean) whenever they start accepting CD.

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    What ever happened to DOWS?

    Did they get TARP money and move to CAP CANA?

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