Page 1 of 2 12 LastLast
Results 1 to 10 of 13
  1. #1
    Regular
    Join Date
    Aug 2003
    Posts
    56
    Post Thanks / Like

    Default 16% APR CD at Banco Leon

    I've been told that many ex-pats invest and live off the monthy interest paid on this CD. Is this true, and if so, is it recommended given the inherent risks?

  2. #2
    Regular
    Join Date
    Jan 2006
    Posts
    497
    Post Thanks / Like

    Default

    Quote Originally Posted by Premier View Post
    I've been told that many ex-pats invest and live off the monthy interest paid on this CD. Is this true, and if so, is it recommended given the inherent risks?
    The only risk would be a currency devaluation !

    Today 35 pesos = 1 dollar
    Year from now (assuming) 40 = 1 dollar

    Invest US$10,000 now = RD 350,000 * 0.16 = 406,000 after one year

    So if it were 40 in a year that would translate to US 10,150, a gain of $150
    If the peso went higher you would lose money !

  3. #3
    Silver
    Join Date
    Sep 2007
    Posts
    2,833
    Post Thanks / Like

    Default

    Then there is the redemption certificate , whereby if you lose your " bearer bond " you lose ALL of your money.

    As tempting as this is, there are too many variables, where you will never recover your initial investment.

    With any Investment and or chance to make more money that you thought possible,

    Need I say more.....Probablly,

    Caveat emptor - Wikipedia, the free encyclopedia

  4. #4
    Bronze
    Join Date
    Mar 2005
    Posts
    1,636
    Post Thanks / Like

    Default

    Quote Originally Posted by Premier View Post
    I've been told that many ex-pats invest and live off the monthy interest paid on this CD. Is this true, and if so, is it recommended given the inherent risks?
    This is pretty dicey, particularly if it is your only source of income.

    I bought a CD when I moved here in 2001 at Banco Popular for 16%. I put the "bearer certificate" in a safe and promptly forgot about it. It was pretty big, about RD$500,000, but I was building my house and simply spaced it.

    Went to cash it in the other day and discovered the interest rates had changed over the years. I made some money anyhow, but not near as much as if I had the same money in a US savings account.

    I also remember a lady who put USD $2,000,000 into CDs when she started building a home in Cabrera. The peso was 25:1 at the time (roughly). Then it went to 50:1 for a little while. Pretty much wiped her out because she needed the cash for something she was doing. Ouch! It was real sad.

    Be careful...anything that looks too good to be true simply means you are not seeing the whole picture.

  5. #5
    Platinum
    Join Date
    Jul 2007
    Posts
    16,393
    Post Thanks / Like

    Default

    Send a pm to SantiagoDR here on DR1 as he is in the know about this.

  6. #6
    Bronze
    Join Date
    Dec 2007
    Posts
    505
    Post Thanks / Like

    Default

    Quote Originally Posted by JDJones View Post
    There's two sides to every story.

    What about the folks who bought CD's offered at 50%, when the exchange rate was 50:1 ?

    And then it dropped to 30:1.....

    It works both ways.
    and I was one of those people. I'm way ahead on my initial "gamble". However you may consider holding off investing in pesos. See where it goes in the next few months. Buy distress sale real estate. There's some bargains out there.

  7. #7
    Gold
    Join Date
    Sep 2008
    Posts
    7,919
    Post Thanks / Like

    Default

    i thought the cds were a fixed rate for various time periods...so the rate is what you get at the time, how does it go down

  8. #8
    Platinum
    Join Date
    Apr 2005
    Posts
    11,109
    Post Thanks / Like

    Default

    Quote Originally Posted by jrhartley View Post
    i thought the cds were a fixed rate for various time periods...so the rate is what you get at the time, how does it go down
    Lemme splain this:

    The RATE is fixed, the TASA you bought RD Pesos vs your Libra Esterlina fluctuates every day cwazy wabbit!
    Last edited by Tamborista; 11-20-2008 at 10:58 PM.

  9. #9
    Gold
    Join Date
    Sep 2008
    Posts
    7,919
    Post Thanks / Like

    Default

    errrrrrrrrr you mean it only flucktates when you cccchhhange it from one current to another currant si

  10. #10
    Bronze
    Join Date
    Dec 2007
    Posts
    505
    Post Thanks / Like

    Default Zaktly

    Quote Originally Posted by Tamborista View Post
    Lemme splain this:

    The RATE is fixed, the TASA you bought RD Pesos vs your Libra Esterlina fluctuates every day cwazy wabbit!
    Look at the history of the pesos' value in relation to the currency of your choice. Then factor in the interest rate. Real simple. Good luck.

Page 1 of 2 12 LastLast

Tags for this Thread

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •