Can I buy a CD in pesos as a non resident?

giga

New member
Feb 11, 2012
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hi,

I live in eu, I d like to buy a cd from a bank
in dominican republic on my nexr visit, since I travel to the
dr often, I know they offer an interesting return,

can I buy a cd in dr in pesos as a non resident?

what is the best bank to do that?
(most popular or that offer free checking/ online banking)

thank you ;-)
 

SKY

Gold
Apr 11, 2004
13,470
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Anyone can buy a CD, you don't need to be a resident. But you first need to open an account. Most banks require a letter from a bank in your home country, a copy of your passport, and possible reference's or one reference from a local bank account holder. These all vary from bank to bank.
 

Criss Colon

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Jan 2, 2002
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yahoomail.com
"Look,BEFORE you LEAP!
Many people come to the DR,and are lured by the relatively high interest rates paid by DR banks and finance houses.
They fail to take into the equation,the cost to convert their native currency,usually US dolllars,or Euros,into DR pesos,then back into their native currency,should they choose to repatriate their funds.
They sometimes also do not calculate the higher than their home countries inflation rate here in the DR,often near 10% per year.
That 15% annual interest rate,suddenly looks more like a "Break Even" point!
My suggestion,and that of more than a few others here on DR1,(Who Actually live,and work here) is to think "long & hard" before you think that "investing" in DR pesos is a hedge against inflation.
You may be buying into a potentional inflation "Nightmare" here.
For example,are you taking into your calculations,that there will be a Presidential Election here in May?
The current administration is doing everything in it's power,and MORE,to maintain a stable peso,and not institute massive taxes to pay for a nearly insumountable overseas debt?
What do you foresee when the elections are over?
I'll tell you what many "DR1ers" see,DR peso is heavily devalued,as in should be already,and new/increased taxes on most everything,ie.all goods,AND services.
The DR economy,is based upon a huge "Ponzi Scheme". Get in early,or get left holding the debt!
They produce very little here,just a few agricultural products.
The sales do not generate enough Dollars/Euros on the international market to pay the DR's huge Int.debt,sooooooooooo the DR must keep borrowing "New Money",to payback "Old Debt"!
They also depend heavily on the "Remisas",(Funds wired/carried into the DR by "Dominicans Abroad"),and "Drug Money"!
There you have it!
STILL want to put your money in a DR bank for,"Safe Keeping"????
Cris Colon
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
 

zoomzx11

Gold
Jan 21, 2006
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CC gave you the best free advice you are likely to see in this lifetime. He must be in a good mood!!!!!!!
 

Criss Colon

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Jan 2, 2002
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yahoomail.com
"On second thought Phuck 'Em"
W.C.Fields,after making an un-characteristic kind remark about children!
It also brings to mind the "Old Saying",
"If you're so SMART,how come you ain't RICH"?
Well,I ain't Rich,put I ain't POOR either!
Sometimes it's better to be "Comfortable".
And sleep well at night. :sleep:
Cris Colon
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
 

giga

New member
Feb 11, 2012
44
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[
hi cris,
I do not agree with part of your post,
inflation rate to me is stablyng growing,
at stable rate

I was in dr on 2006, 07 08 09 11 12 and
cost of food , lodging has gone up but
at a tolerable rate, maybe 1.6/2%.. just
guessing ,

to me a 16 % is a good return and far from
break even

pls explain why you assume inflation rate
is a double digit, can you provide an example?
thank you for posting

QUOTE=Criss Colon;1058039]"On second


thought Phuck 'Em"
W.C.Fields,after making an un-characteristic kind remark about children!
It also brings to mind the "Old Saying",
"If you're so SMART,how come you ain't RICH"?
Well,I ain't Rich,put I ain't POOR either!
Sometimes it's better to be "Comfortable".
And sleep well at night. :sleep:
Cris Colon
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC[/QUOTE]

plai
 

Criss Colon

Platinum
Jan 2, 2002
21,843
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yahoomail.com
I read the Dominican Republic newspapers EVERYDAY.
Also watch Dominican TV news shows,but MOST IMPORTANT,I have lived here for 16 years.
I have 10 people in my household,including 4 kids.I buy a LOT of food,pay for a lot of "school',medical insurance,gasoline,and electricity.
I leave mu dollars in the USA,and bring them here as needed.
I prefer "SAFE" to "SORRY"!
As for "Figures",I'll leave those to "Suarenz",and "O&C"!
CC
Sorry "S",
I can't spell you "apellido" from memory.
CRIS COLON
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
 

Ken

Platinum
Jan 1, 2002
13,884
495
83
[
hi cris,
I do not agree with part of your post,
inflation rate to me is stablyng growing,
at stable rate

I was in dr on 2006, 07 08 09 11 12 and
cost of food , lodging has gone up but
at a tolerable rate, maybe 1.6/2%.. just
guessing ,

When you say you were in the DR in the indicated years, do you mean you spent extensive time here or were here on vacation visits?

What CC is saying is that the peso is presently being propped up so as not to cause to much stir before the election in May. However, after the election, it is very possible that the peso is going to fall, and maybe fall hard, like it did during the administration of the president before Leonel when the peso fell a long way against the dollar. Those of us who live here expect trouble ahead. Like Chris, I keep my money, what I have of it, and write checks in dollars on my bank account and cash them at a local banco de cambio to get peso for a short period. During the 26 years I have lived here I have seen the peso go from less than 2 to 1 to more than 40 to 1.

Dollars are your friend.
 

Rep Dom

Bronze
Dec 27, 2011
1,237
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0
of course, its always best to keep a stable and strong currency. To my opinion, you should keep it safe in your home country and cash it in pesos for your current expenses...
 

giga

New member
Feb 11, 2012
44
0
0
hi ken,

your answer saddens me a lot :-(

for a moment I thought id found
a good source of passive income so that
I can leave the hard nyc life and move
to dr and start a new life

i have a some $$ saved, here banks give you
0.2% /1%as return...

my idea was to invest a small amount, just say 10k so at 15%
it would produce that $100/mo that can
help with monthly expenses,

would that be risky too on your opinion?
bye



UOTE=Ken;1058098]When you say you were in the DR in the indicated years, do you mean you spent extensive time here or were here on vacation visits?

What CC is saying is that the peso is presently being propped up so as not to cause to much stir before the election in May. However, after the election, it is very possible that the peso is going to fall, and maybe fall hard, like it did during the administration of the president before Leonel when the peso fell a long way against the dollar. Those of us who live here expect trouble ahead. Like Chris, I keep my money, what I have of it, and write checks in dollars on my bank account and cash them at a local banco de cambio to get peso for a short period. During the 26 years I have lived here I have seen the peso go from less than 2 to 1 to more than 40 to 1.

Dollars are your friend.[/QUOTE]
 

DR Mpe

Banned
Mar 31, 2003
1,191
36
48
I was here last time when Hipolito entered office. The exchange rate went from 16 to 54 in short time... Who cared about the 15-20% or so interest rate on the peso... Keep the dollar...
 

Ken

Platinum
Jan 1, 2002
13,884
495
83
There was a time when I would have thought it was a good idea. When I arrived in the DR in 1986 the exchange rate was very stable. At that time it was less than 2 to 1. Because of the stability, that would have been the time to buy the CD

A big jump came when then President Balaguer needed money to finance the renovation on Santo Domingo in preparation for the 500th anniversary of the discovery of America. Other things have happened since then, usually the result of over spending by the government that have weakened the peso still further. 8 years ago it looked like we were headed toward 100 to 1, but that president lost the election, the IMF came to the rescue, and things got more or less under control.

Now the government that replaced the previous president has been seriously spending beyond its means, and just the other day the relationship with IMF was ended. The business groups in the country are urging the president not to over spend now that the IMF is not looking over his shoulder, but based on the record to date, that is not something you can have confidence will be done.

The IMF has long urged the country to let the peso float and find its own level. But that has never been done. The rate of exchange is controlled by the government. Due to the heavy borrowing by the government, many believe that after the
election in May that the peso will fall in value. A year from now we could be at 45 to 1 and prices in the stores will be a lot higher.

During the first days when the peso is falling, you don't notice it in the stores because the stock is on the shelves and paid for by the merchant. But then when it is necessary to reorder, prices have to go up because the ordered items cost more, and up still further because the merchant increases his prices further in anticipation of the further weakening of the peso.

The above is overly simplistic, but my point is that if you have dollars you won't get rich but you will stay more or less
even while those with pesos are seeing their money buying less and less. Your CD may have a 15% return on paper, but the pesos you get are unlikely to buy 15% more because it will take more of those pesos to buy the items you could buy on the day you took out the CD.

I don't know what your money situation is, but you don't need as much money to live here as you do in the US if you spend within your means. I dropped out early, moved on a boat and went South so I don't have a retirement income close to what it might have been if I had kept working, but I do ok. I don't eat out a lot and I don't have a car, etc., but by controlling my expenses I am doing fine. I am certainly living better than I would in the US on the same income.

My suggestion would be to look for investment opportunities in the US rather than buy a CD here, in other words, keep your money in dollars rather than pesos, and to think in terms of tailoring your life style to your income.
 

windeguy

Platinum
Jul 10, 2004
42,211
5,966
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giga - Wait for a period of time after the next election before you do anything. It is a very uncertain time period now and nobody knows what will happen. If Hippo wins you probably don't want to go near the DR peso. If the PLD wins, it still is not a great idea but there is probably less risk.
 

giga

New member
Feb 11, 2012
44
0
0
excuse me ken but I miss something here

I understand fluctuation of tge exchange rate and the infaltion,

Inflation:

even with these ups and downs of
the drp ,
the dominican people were
able to buy food for their families and
drive their cars while holding their jobs,

if the inflaton was so.high like you day peoplr
woild begin to protest,taking the streets, start a revolution....
so can u pls.provide an example of something that
had gone high in price?

devaluation

if I live I. dr and I get say $500/mo (in pesos) in interests
who cares (lets just say) if my capital depreciates? I still get $500/mo in interests
dont you agree?

rob


UOTE=Ken;1058237]There was a time when I would have thought it was a good idea. When I arrived in the DR in 1986 the exchange rate was very stable. At that time it was less than 2 to 1. Because of the stability, that would have been the time to buy the CD

A big jump came when then President Balaguer needed money to finance the renovation on Santo Domingo in preparation for the 500th anniversary of the discovery of America. Other things have happened since then, usually the result of over spending by the government that have weakened the peso still further. 8 years ago it looked like we were headed toward 100 to 1, but that president lost the election, the IMF came to the rescue, and things got more or less under control.

Now the government that replaced the previous president has been seriously spending beyond its means, and just the other day the relationship with IMF was ended. The business groups in the country are urging the president not to over spend now that the IMF is not looking over his shoulder, but based on the record to date, that is not something you can have confidence will be done.

The IMF has long urged the country to let the peso float and find its own level. But that has never been done. The rate of exchange is controlled by the government. Due to the heavy borrowing by the government, many believe that after the
election in May that the peso will fall in value. A year from now we could be at 45 to 1 and prices in the stores will be a lot higher.

During the first days when the peso is falling, you don't notice it in the stores because the stock is on the shelves and paid for by the merchant. But then when it is necessary to reorder, prices have to go up because the ordered items cost more, and up still further because the merchant increases his prices further in anticipation of the further weakening of the peso.

The above is overly simplistic, but my point is that if you have dollars you won't get rich but you will stay more or less
even while those with pesos are seeing their money buying less and less. Your CD may have a 15% return on paper, but the pesos you get are unlikely to buy 15% more because it will take more of those pesos to buy the items you could buy on the day you took out the CD.

I don't know what your money situation is, but you don't need as much money to live here as you do in the US if you spend within your means. I dropped out early, moved on a boat and went South so I don't have a retirement income close to what it might have been if I had kept working, but I do ok. I don't eat out a lot and I don't have a car, etc., but by controlling my expenses I am doing fine. I am certainly living better than I would in the US on the same income.

My suggestion would be to look for investment opportunities in the US rather than buy a CD here, in other words, keep your money in dollars rather than pesos, and to think in terms of tailoring your life style to your income.[/QUOTE]
 

windeguy

Platinum
Jul 10, 2004
42,211
5,966
113
What you are saying is has some basis in truth, but remember this, you are making a change from US$ to pesos. At that time you are committed and have transferred your "faith" into the DR pesos. When the peso falls in value, people might get a raise in pay to compensate. Your changed dollars do not have that option. Do not do anything until a few months after the elections.
 

Ken

Platinum
Jan 1, 2002
13,884
495
83
excuse me ken but i miss something here

i understand fluctuation of tge exchange rate and the infaltion,

inflation:

Even with these ups and downs of
the drp ,
the dominican people were
able to buy food for their families and
drive their cars while holding their jobs,

if the inflaton was so.high like you day peoplr
woild begin to protest,taking the streets, start a revolution....
So can u pls.provide an example of something that
had gone high in price?

Your inexperience with the Dominican Republic is showing.

1. The rate of exchange versus the dollar almost never goes down, always up (more pesos can be purchased with the dollar), and sometimes at an alarming rate. As someone else pointed out, at the end of Hippo's term,during which the exchange rate went from 16 or 18 to 1 to 50+ to 1 and likely would have gone to 100 to 1 if he had another year.

Regarding people still feeding themselves, a large percentage of the population does this by eating rice, beans, eggs, meat we would consider scraps, etc. Many of these products are subsidized by the government because the people can't afford them at the market price.

As far as driving cars, that is a luxury. A large percentage have no car and ride the bus, publico and guagua, the amount they can charge controlled by the government because the people need low cost transportation.

Lack of protest, read the thread on that subject that Robert started recently. It is amazing that the people do not
protest more considering what they must endure. Dominicans protest with public strikes, burning tires, stopping traffic on the highways, etc., but even so it is surprising they don't do it more. If the government was not subsidizing what is called the "market basket" of food stuffs and propane cooking gas, and if if the country really cracked down on the very high percentage of people who do not pay their electric bill, and if the bus, guagua and publico unions were given free
rein in setting prices, you can be sure the country would be awash in protest demonstrations.

Finally. the great majority of people do not get a raise when the peso falls, but prices increase. And what most are paid is very low to begin with. For most employees, the there are 3 different salary structures depending on their employer. Those working for hotels, condominiums, etc., have the best of the 3. Those in the top group are presently getting the equivalent of about US$250 per month, and if the peso falls to 45 to 1 during the months after the election, which is quite possible, then they will be getting the equivalent of US$215 and prices in the stores will be quite a bit higher than they are now because the merchants are paying in dollars for much of what they sell, except rice, beans, eggs, etc which are produced here.

It makes no difference to me if you go ahead with your plan. I, and others who live here and know the country say don't do it, but it is your money and your decision.
 
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Tamborista

hasta la tambora
Apr 4, 2005
11,747
1,343
113
excuse me ken but I miss something here

I understand fluctuation of tge exchange rate and the infaltion,

Inflation:

even with these ups and downs of
the drp ,
the dominican people were
able to buy food for their families and
drive their cars while holding their jobs,

if the inflaton was so.high like you day peoplr
woild begin to protest,taking the streets, start a revolution....
so can u pls.provide an example of something that
had gone high in price?

devaluation

if I live I. dr and I get say $500/mo (in pesos) in interests
who cares (lets just say) if my capital depreciates? I still get $500/mo in interests
dont you agree?

rob

DUH...If your capital depreciates by 30% and you are getting paid 15% how does that math work homey?
The RD Peso could very well depreciate to mid 40's, I am not saying it will, but look at The Hipo years....

Ken and others have lived here for 15 PLUS years and have seen the good times as well as the bad,and know WTF they are talking about. I would be more than happy to sell you my RD Peso collection for USD or EUR, I take PAYPAL or can make a delivery.
 

giga

New member
Feb 11, 2012
44
0
0
hi ken,

so buy a CD in drp is risky all right,

what about a CD in USD? what is the interest rate offered by DR banks on thosed CDs?

rob

Your inexperience with the Dominican Republic is showing.

1. The rate of exchange versus the dollar almost never goes down, always up (more pesos can be purchased with the dollar), and sometimes at an alarming rate. As someone else pointed out, at the end of Hippo's term,during which the exchange rate went from 16 or 18 to 1 to 50+ to 1 and likely would have gone to 100 to 1 if he had another year.

Regarding people still feeding themselves, a large percentage of the population does this by eating rice, beans, eggs, meat we would consider scraps, etc. Many of these products are subsidized by the government because the people can't afford them at the market price.

As far as driving cars, that is a luxury. A large percentage have no car and ride the bus, publico and guagua, the amount they can charge controlled by the government because the people need low cost transportation.

Lack of protest, read the thread on that subject that Robert started recently. It is amazing that the people do not
protest more considering what they must endure. Dominicans protest with public strikes, burning tires, stopping traffic on the highways, etc., but even so it is surprising they don't do it more. If the government was not subsidizing what is called the "market basket" of food stuffs and propane cooking gas, and if if the country really cracked down on the very high percentage of people who do not pay their electric bill, and if the bus, guagua and publico unions were given free
rein in setting prices, you can be sure the country would be awash in protest demonstrations.

Finally. the great majority of people do not get a raise when the peso falls, but prices increase. And what most are paid is very low to begin with. For most employees, the there are 3 different salary structures depending on their employer. Those working for hotels, condominiums, etc., have the best of the 3. Those in the top group are presently getting the equivalent of about US$250 per month, and if the peso falls to 45 to 1 during the months after the election, which is quite possible, then they will be getting the equivalent of US$215 and prices in the stores will be quite a bit higher than they are now because the merchants are paying in dollars for much of what they sell, except rice, beans, eggs, etc which are produced here.

It makes no difference to me if you go ahead with your plan. I, and others who live here and know the country say don't do it, but it is your money and your decision.
 

Ken

Platinum
Jan 1, 2002
13,884
495
83
Don't know, have not looked into it. Undoubtedly someone will be able to answer your question.

In all your planning, keep in mind that you will have to report your earnings to IRS and pay US income tax. Take a look at the thread that was running a few weeks ago reporting on the agreement between the DR and IRS to report the bank accounts of US citizens living in the DR.

The penalty, especially if you have control of US$10,000 or more in bank accounts or CDs is quite seriousl

http://www.dr1.com/forums/legal/119305-dominican-banks-required-report-us-citizens-holding-10.html
 
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