I checked my peso CD account with Banca SantaCruz and noticed the rate had gone down by over 4 percentage points! I sent an email asking why this happened and they just told me that rates have decreased. Has this happened in all banks in the Dominican Republic?
- Thread starter pmey27
- Start date
Reduction in bank CD rates?
Does the CD's issued via Banco Reservas and Popular on behalf of the Central Bank get paid free of tax ? I am aware they also pay on a 90 day basis rather than monthly, thanks in advance.
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Look before you leap. Many banks yield higher rates to draw deposits but are charging higher fees, thus mitigating any overall savings. Plus, transferring a checking account can create more headaches than purchasing a lightweight stroller.
I understand why people would "invest" in these when they are paid in pesos....but if you have Dollars/Euros....it escapes sound investment sense to actually "invest" in these.
1. You lock your funds up for the period you choose (see chart posted by JD);
2. Is your investment "insured" "guaranteed";
3. Have you thought about or even know the effect of Peso inflation on those returns;
4. Are those returns calculated using simple interest or compound interest;
5. What effect will rising US interest rates (likely starting today) have on the value of the Peso;
6. Why do smart Dominican investors keep more money in Dollar/Euro accounts than in Pesos?
7. What can your money earn elsewhere on a risk adjusted basis?;
8. Is the risk worth the reward?
Again, for those paid in Pesos, it might be a palatable situation.....But, for all others.....you only need to know that there has only been one period of time when putting money in Pesos was a good "investment".....and for that period in 2003/2004 you needed nerves of steel as the Peso and the Dominican banking system was rescued by the IMF.
This is not meant to belittle those who choose to "invest" in these bank certificate "investments".....it is really meant for the unsophisticated who come here after hearing/seeing what look like outstanding returns on investment after reading some article in one of "those" magazines that tout the high investment returns and low cost of living in the beach paradise that is the DR.
Unless the Central Bank has already priced in a US interest rate hike today....the peso is likely to devalue further in the next two weeks.
Lots of relevant data here: www.bancentral.gov.do
The real question is by how much?
Respectfully,
Playacaribe2
1. You lock your funds up for the period you choose (see chart posted by JD);
2. Is your investment "insured" "guaranteed";
3. Have you thought about or even know the effect of Peso inflation on those returns;
4. Are those returns calculated using simple interest or compound interest;
5. What effect will rising US interest rates (likely starting today) have on the value of the Peso;
6. Why do smart Dominican investors keep more money in Dollar/Euro accounts than in Pesos?
7. What can your money earn elsewhere on a risk adjusted basis?;
8. Is the risk worth the reward?
Again, for those paid in Pesos, it might be a palatable situation.....But, for all others.....you only need to know that there has only been one period of time when putting money in Pesos was a good "investment".....and for that period in 2003/2004 you needed nerves of steel as the Peso and the Dominican banking system was rescued by the IMF.
This is not meant to belittle those who choose to "invest" in these bank certificate "investments".....it is really meant for the unsophisticated who come here after hearing/seeing what look like outstanding returns on investment after reading some article in one of "those" magazines that tout the high investment returns and low cost of living in the beach paradise that is the DR.
Unless the Central Bank has already priced in a US interest rate hike today....the peso is likely to devalue further in the next two weeks.
Lots of relevant data here: www.bancentral.gov.do
The real question is by how much?
Respectfully,
Playacaribe2
If you are talking about CDs then yes all of them come from BancoCentral via CEVALDOM. High rate are no longer available no matter what is your bank. 9.5% as shown above is as high as you will be getting and that is not a great rate in DOP.
Keep your money in US or EUROS. Not in DOP.