Putting money into Dominican Cert of Deposits?

May 29, 2006
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Wondering how risky this is and what kind of return is possible. I'm getting about 6% back on my "safe" investments now in the US, but I see posts of much more with Dominican Banks. Do they pay regular dividends or do you have to wait the full term?
 

the gorgon

Platinum
Sep 16, 2010
33,997
83
0
Wondering how risky this is and what kind of return is possible. I'm getting about 6% back on my "safe" investments now in the US, but I see posts of much more with Dominican Banks. Do they pay regular dividends or do you have to wait the full term?

i have no idea of what type of returns you can get on these local certificates of deposit. i think Playacaribe is your guy for this kind of info. i hate financial economics, and stay as far from it as i can.

however, do not fall into the trap of putting your money with these guys who promise you 20% returns. the highways and byways are littered with the remains of guys who tried that one. take what a reputable bank offers, or leave your corn in the USA.
 

jd426

Gold
Dec 12, 2009
9,512
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yeagh, what ever happened to those 18% returns some banks Promised couple years back ?
Did they all fold up their tents ?

Im guessing there was no equivalent of the FDIC to protect the Depositors Principal.
 

Timotero

Bronze
Feb 25, 2011
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Wondering how risky this is and what kind of return is possible. I'm getting about 6% back on my "safe" investments now in the US, but I see posts of much more with Dominican Banks. Do they pay regular dividends or do you have to wait the full term?

If your really getting 6% annually from "safe" (i.e. not stocks, etc) investments in the US, my advice would be to count your blessings and leave it right where it is.
 

Kipling333

Bronze
Jan 12, 2010
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You will not get much from the normal banks but Central Bank Certificates will give you more than 10 % , depending on the length of the deposit and is safe and is tax free in this country . If you are a resident for tax purposes in another country I imagine you will have to pay tax in that country on the interest .
 
Jan 9, 2004
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You will not get much from the normal banks but Central Bank Certificates will give you more than 10 % , depending on the length of the deposit and is safe and is tax free in this country . If you are a resident for tax purposes in another country I imagine you will have to pay tax in that country on the interest .

I do not believe you can buy certificates from the Banco Central any longer.

If the OP is getting a 6% yield in the US on safe insured investments....the money should be left there.

Emerging markets, of which the DR is one, will all be taking a currency conversion rate hit....likely between now and year end.


Respectfully,
Playacaribe2
 

Abuela

Bronze
May 13, 2006
1,952
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You will not get much from the normal banks but Central Bank Certificates will give you more than 10 % , depending on the length of the deposit and is safe and is tax free in this country . If you are a resident for tax purposes in another country I imagine you will have to pay tax in that country on the interest .

No longer tax free .... 10% from interest is paid as DR income tax
 

Matilda

RIP Lindsay
Sep 13, 2006
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bear in mind that during his government the dollar went from 16 pesos to 55 and inflation was roaring.

But those who took them out over 5 years did very nicely when Hippo left, and the peso went back down and inflation was under control. They just got a bit stuck after that.

Matilda
 

Kipling333

Bronze
Jan 12, 2010
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No longer tax free .... 10% from interest is paid as DR income tax

Thank you for that information.. Banco Popular informed me only last month that they would arrange the certificate for me and the interest would be tax free .. but they have told me incorrect things before .
 

ohmmmm

Bronze
Jun 11, 2010
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I believe the Dominican Peso has been depreciating about 6% per year compared to the US dollar over the past six years.
 
May 29, 2006
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It's an international mutual fund. I'm not looking for unrealistic growth, but 8% overall would be nice if a DR Cert could do that.
 

windeguy

Platinum
Jul 10, 2004
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But those who took them out over 5 years did very nicely when Hippo left, and the peso went back down and inflation was under control. They just got a bit stuck after that.

Matilda

It is called luck. Those days are long gone.
 

windeguy

Platinum
Jul 10, 2004
42,211
5,966
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It's an international mutual fund. I'm not looking for unrealistic growth, but 8% overall would be nice if a DR Cert could do that.

Unlikely after the Forex rate gets factored in that you would get 8%. You can only get these CDs by going into one of the regular banks since the Banco Central no longer directly offers them.
 

Luperon

Who empowered China's crime against humanity?
Jun 28, 2004
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A safe usa six percent return makes you a financial genius. You should be a billionaire.
 
Jan 9, 2004
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It's an international mutual fund. I'm not looking for unrealistic growth, but 8% overall would be nice if a DR Cert could do that.

You are earning 6% and would consider a DR certificate for 8%.

So for 2% you would take on currency rate devaluation risk in an emerging market currency? Even beyond that, if you needed to convert those pesos back to dollars at any point.....kiss that 2% yield you thought you got....goodbye.

Unless you can find bank certificates yielding double digits per annum...it is not a good/intelligent move.

Dominicans that can....have investment accounts outside the country and out of the risk the peso/government currently presents.

There has only been one period in the last 15 years when it would have been a good investment.....not a wise one, or even a prudent one....but a good one....and that was right before the DR was on the verge of financial collapse....and the IMF rescued the country and its currency. If you had bought pesos at 55:1 and held until the rescue took hold.....you would have done well.


Respectfully,
Playacaribe2
 

the gorgon

Platinum
Sep 16, 2010
33,997
83
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You are earning 6% and would consider a DR certificate for 8%.

So for 2% you would take on currency rate devaluation risk in an emerging market currency? Even beyond that, if you needed to convert those pesos back to dollars at any point.....kiss that 2% yield you thought you got....goodbye.

Unless you can find bank certificates yielding double digits per annum...it is not a good/intelligent move.

Dominicans that can....have investment accounts outside the country and out of the risk the peso/government currently presents.

There has only been one period in the last 15 years when it would have been a good investment.....not a wise one, or even a prudent one....but a good one....and that was right before the DR was on the verge of financial collapse....and the IMF rescued the country and its currency. If you had bought pesos at 55:1 and held until the rescue took hold.....you would have done well.


Respectfully,
Playacaribe2

playa, it was neither wise, nor good, but it was lucky. not very many third world currencies revalue overnight.
 

cavok

Silver
Jun 16, 2014
9,527
4,045
113
Cabarete
Wondering how risky this is and what kind of return is possible. I'm getting about 6% back on my "safe" investments now in the US, but I see posts of much more with Dominican Banks. Do they pay regular dividends or do you have to wait the full term?

You can buy special certificates of deposit(issued by Banco Central) from several of the local banks. I purchased one at BHD about two years ago(I have since sold it) and a friend of mine bought his at Banco Popular.

Your main risk is the currency devaluation. So far this year it has been about 3% based on the USD. Right now I think the best you can get is 10%, so, less 3% devaluation and 10% tax deducted by the bank on your semi-annual interest payments, and you're netting 6%. Personally, I don't think it's worth the risk.