Again info about Certificate or deposit money in DR bank

Status
Not open for further replies.

fiocco

New member
Mar 26, 2016
73
0
0
Hi,
Really I am european so I was thinking to bring Euro so correct me if I am wrong:
In 2012 1 Euro was about Pesos 49.60 .
Invest in certificate for example capital Euro 100 = 4960 Pesos with average interest rate 7%
Beginning 2013 I have 5307 Pesos
Beginning 2014 I have 5678 Pesos
Beginning 2015 I have 6076 Pesos
Beginning 2016 I have 6501 Pesos
Exchange rate April 16 1 Euro = about 51.3 Pesos
I convert back in euro and I have 126 Euro (note exchange rate not correct 100% because they are from forex and not local banking rate)
Of course there is the risk of fluctuation. I need your opinion please. If I invest my money in Europe my interest is almost 0. The interest rate on deposit are below zero (in Italy right now) and also some state bond give negative interests. I have some money in a fund but not very big results in years.
Another important question:
If you invest a sum (for example 100.000 Euro) in local currency in a Bank in Dr and after a certain period you want to convert again in the original currency (because maybe you want to transfer back to Europe) or i want to change in Usd, can i do that without any big problem or delay ? Or the bank try to avoid to change in foreigner currency? And will the exchange rate be reasonable (same if I change in Europe for ex Euro in Usd or Eur in Gbp ) or in DR is much much worst (do they charge many and many pips)?
Any reply will be very welcome.
 

CristoRey

Welcome To Wonderland
Apr 1, 2014
11,717
7,977
113
I say GO FOR IT then write us back in 5 years and let us know how it worked out :cheeky:
 

Tamborista

hasta la tambora
Apr 4, 2005
11,747
1,343
113
Perhaps start with €100K, and "dollar cost average" into €500K, @ least you'll have a better chance of breaking even in 5 years if the DOP only devalues @ a rate of 7% / year.
 

melphis

Living my Dream
Apr 18, 2013
3,489
1,676
113
According to my math based on your previous post this is what I get based on 100,000USD or its equivalent. If you took 100k in 2012 and put it into a DR CD note and left it for 4 years, today you would net out $25,586US profit. This is after the 10% DR tax and is based on the numbers provided by Santiago DR in your previous post.

If you took the same 100k and did nothing but watch it devalue, today you would have 84,934 US. A loss of 15,066.

You would be 10,520US ahead if you bought a Dominican CD in 2012.

Again this is all based on the percentage rates in your previous post. I can't predict the future but you certainly would have made money in the past. In my first example not only would you be ahead you would still have the original 100k not the devalued 85k. So the reality is you would be up closer to 40k after tax.

Normally I charge for this info but what the hell. Its free money if you can stomach the risk.
 

melphis

Living my Dream
Apr 18, 2013
3,489
1,676
113
40 k "after tax" his accountant must be magician.

No magic just simple math. The 100k devalued is 85 k. The 100k in a CD for the same 4 years with intrest rates of 9, 9, 6, an 6 is 133,495 (compounded). Less 10% DR tax(on the 33,495 interest) leaves 130,145. Now minus the devalued 85k from this and you actually get 45k and change.

You can disagree all you want but the math does not lie.

The original question from the OP was is a CD in the DR worth the risk. Up till now it was definitely worth doing but as I said previously I can't predict the future so who knows
 

Virgo

Bronze
Oct 26, 2013
824
0
0
Hi,

If you invest a sum (for example 100.000 Euro) in local currency in a Bank in Dr and after a certain period you want to convert again in the original currency (because maybe you want to transfer back to Europe) or i want to change in Usd, can i do that without any big problem or delay ? Or the bank try to avoid to change in foreigner currency? And will the exchange rate be reasonable (same if I change in Europe for ex Euro in Usd or Eur in Gbp ) or in DR is much much worst (do they charge many and many pips)?
Any reply will be very welcome.
Since we had a relatively long thread presumably trying to answer you (which unfortunately was closed), you may want to clarify WHAT specifically do you still need clarification on.
Otherwise you may just read the closed thread.
 

melphis

Living my Dream
Apr 18, 2013
3,489
1,676
113
I got side tracked when I did my calculations above. The bottom line is if you took the 100k US and converted it to pesos what would happen to it. If you left it for 4 years with no interest it would be worth 85k today. With compound interest of the 9,9,6, and 6 less the DR 10% tax on interest only you would have 114,000 USD. Converted back from pesos.
Thats a difference of 29,000 to your favor.
Sorry for the above confusion. I still think its a good deal if your not here on a US passport as any interest has to be reported back.
 

Virgo

Bronze
Oct 26, 2013
824
0
0
I got side tracked when I did my calculations above. The bottom line is if you took the 100k US and converted it to pesos what would happen to it. If you left it for 4 years with no interest it would be worth 85k today. With compound interest of the 9,9,6, and 6 less the DR 10% tax on interest only you would have 114,000 USD. Converted back from pesos.
Thats a difference of 29,000 to your favor.
Sorry for the above confusion. I still think its a good deal if your not here on a US passport as any interest has to be reported back.

I think the mistake you are making is to compare against the "devalued" amount.

The OP has the money in hard currency. He wouldn't convert it to DOP and let it stand. His alternative would be to put the money in a hard currency CD in a reputable 'first world' bank, earning ~0.15% a year (basically enough to cancel the very low inflation). Essentially he would keep the same US$100K. That is the reference amount to compare against. If he invested instead in a DOP CD he would earn US$14,000 instead (per your calculations).
 

bloody67

New member
Jan 16, 2011
23
0
0
Look be sensible , your chasing dreams frought with risk and insecurity here, if you think hoarding money in the DR is a good bet , my advice just go and toos it in the street.
if you have the means tie up 100k euros or more , invest 2000 euros in taking a trip the the guernsey islands or even just the UK and get non resident account deposit that money in multicurreny account
and take mexican pesos , colombian pesos , etc as your base currency and you will avg about 6 percent or more and most of all you can sleep at night knowing that your in a reputable institution and country
. And consider this , because here its a big scam... alot banks and investment boutique here pray on foreign depositors specially older depositers, a few incidents in Puerta Plata and Cabarete in the ex pat communities
where the older depositer dies and incredibly the money vanishes from the account , i hera several banks have some low lifes that make it their business to keep tabs on the elderly foreign depositers and when they get word that
they pass here or away the money vanishes, their is case right now where the family tried to retrieve some 780,000 US from a local bank in numerous CDs , well betwen the lawyer acting on the foreign family interest and the bank
the oficial word is the guy withdrew all the funds from the CD just before he left for Spain ... yet their is no records of any declaration in or out with that money , and to make it worst the day of the withdrawl claimed by the lawyer via the so called bank records
the guy had already passe away in Madrid three weeks prior , the family mistakenly gave the lawyer the incorrect month of their deceased loved one demised and to their fortune it turns out the lawyer used that incorrect date with his banking buddy to fix a fraudulent
date of withdrawl of the funds by a dead guy ...lol.... anyway these crooks are going to get away with it , why because the judge has ordered the DECEASED to show the withdrawl was not done by him.....how spiffy how dandy ....how much did they pay him
PUT YOUR MONEY INA SAFE BANK IN A SAFE COUNTRY ,,,,,,,,,,DONT BE A VICTUM
 

Virgo

Bronze
Oct 26, 2013
824
0
0
PUT YOUR MONEY INA SAFE BANK IN A SAFE COUNTRY ,,,,,,,,,,DONT BE A VICTUM

Why on earth do you insist on blaming the country and ALL Dominican banks instead of giving the name of the SPECIFIC bank involved in your allegations?

Why not focus on EACH BANK separately? Is that too complicated a concept?

Do you know of cases as you have described (assuming everything you say is true, which I have no way to verify) involving Banco POPULAR, Banco del Progreso or Banco BHD? If not, do not blame them for what supposedly others did.

Should *YOU* be blamed for everything bad a person with the same passport as you do?
 

bloody67

New member
Jan 16, 2011
23
0
0
Your correct , most Dominican are hard working decent people , like anyone else , however their is a huge culture here that beleives its ok to rip off
a foreigner , i myself have grown up as a island boy and i just tell it like it is...if u wanna play fantasy island your choice ... we see u comming
 

fiocco

New member
Mar 26, 2016
73
0
0
Hi,

Considering all the comments (good and not good) about this topic, how can i know which banks are reliable? As new client for the banks and a new person who want to live in DR, all
employees in the bank will try to show only the right and nice "side" to have a good impact to me. Anyhow in your opinion, do you have a short list of reliable banks to visit ? It could be helpful thanks.
 

Virgo

Bronze
Oct 26, 2013
824
0
0
Hi,

Considering all the comments (good and not good) about this topic, how can i know which banks are reliable? As new client for the banks and a new person who want to live in DR, all
employees in the bank will try to show only the right and nice "side" to have a good impact to me. Anyhow in your opinion, do you have a short list of reliable banks to visit ? It could be helpful thanks.

Find out:
WHO is behind the banks, that is, who has controlling interst (family, group, people)?
As much information as possible on those who control the banks (e.g., are they a wealthy family with a lot of other assets?)
Track record of the bank (past trouble, etc) under CURRENT controlling group (they may have bought the bank in bad shape and cleaned up previous messes).

I have mentioned several times: Banco del Progreso, BHD-Leon, Banco Popular.

Scotia Bank is a Canadian bank active in the DR.

Asking anonymous posters in a free board is far from the best source for this. Anyone posting here conceivably MIGHT have a vested interest or agenda. You have to find ways to verify information through reliable sources (how would you do it in your country?).
 

SKY

Gold
Apr 11, 2004
13,470
3,604
113
Banreservas is Government owned and backed. A top DR lawyer told me a long time ago that his money is there and safe.
But that said, they are not the most efficient bank, and their service is pretty much like the DR service all over. BAD

But if you lose your money there the whole Country will be down the tubes anyway.
 
Jan 9, 2004
10,898
2,226
113
The OP asked about "investing" in CD's in Dominican Banks and gave a lengthy but flawed analysis of the potential outcome of investing using Euros.

The OP did not ask about depositing Euros/Dollars converted to pesos in DR banks to live on. That is a separate discussion and since 2003 it has probably been net positive taking into account devaluation/inflation etc. I get that loud and clear.

But I still happen to believe it is not worth the risk.....but risk/reward is after all a personal decision.

All DR banks as well as the government carry a risk rating in the B category from ratings agency Fitch. That rating places their debt in non-investment grade status, known in financial circles as "junk." And as a creditor, when you make a deposit, you are giving an unsecured loan to an institution whose debt, yours included, is rated as non-investment grade "junk."

And to the DR's credit, it, and its banks have been some of the better performing "junk." But that does not negate risk.

So the question becomes, are you comfortable with the potential risk versus the reward? If so, move forward. If not, do not make the "investment."

And finally, if your risk appetite is greater, and you wish to "invest" in Latin America, there are always one year term deposits in Argentina paying 33%.



Respectfully,
Playacaribe2
 
Status
Not open for further replies.