If you cherry pick time frames you can come up with whatever annualized devaluation rate you want.
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Banca Santa Cruz. 14.8% interest, pesos
If you cherry pick time frames you can come up with whatever annualized devaluation rate you want.
I was passing by Banco santa Cruz in Cabarete today, so I thought I'd stop in and ask. They said they know of no CD's or bonds of any type/duration that pay 14.8%. They do have a 6 month CD that pays 7.4% annualized, but that is not the same as 14.8% annual interest.
Maybe the friend that took him there was getting Commission do they give commissions for referrals?I was passing by Banco santa Cruz in Cabarete today, so I thought I'd stop in and ask. They said they know of no CD's or bonds of any type/duration that pay 14.8%. They do have a 6 month CD that pays 7.4% annualized, but that is not the same as 14.8% annual interest.
Maybe the friend that took him there was getting Commission do they give commissions for referrals?
No. Banco Santa Cruz is a legitimate bank - not some operation like Anoeca was. Plus, I don't know how a comission would increase the interst rate unless it was to scam your friend into thinking he was getting 14.8% per year(?).
Your post says Banca Santa Cruz. It that misspelled? Bancas are betting parlours and maybe your friend was led to believe it was the same as Banco Santa Cruz. You did say something about it being written on a piece of paper - something a legitimate bank probably wouldn't do(?).
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I was passing by Banco santa Cruz in Cabarete today, so I thought I'd stop in and ask. They said they know of no CD's or bonds of any type/duration that pay 14.8%. They do have a 6 month CD that pays 7.4% annualized, but that is not the same as 14.8% annual interest.
You found out what was mostly likely and that is the person got a 6 month CD that paid 7.4% annualized and not 14.8% annualized. You have found out what is real and what was a mistake. If he was told a different story by the person that took his money, it had to be a lie.
You found out what was mostly likely and that is the person got a 6 month CD that paid 7.4% annualized and not 14.8% annualized. You have found out what is real and what was a mistake. If he was told a different story by the person that took his money, it had to be a lie.
Either a lie or just plain clueless. I've found that many of the reps in the banks don't really understand financial instruments all that well - especially bonds.
Either a lie or just plain clueless. I've found that many of the reps in the banks don't really understand financial instruments all that well - especially bonds.
You are correct, I was giving the person the benefit of the doubt.
No. Banco Santa Cruz is a legitimate bank - not some operation like Anoeca was. Plus, I don't know how a comission would increase the interst rate unless it was to scam your friend into thinking he was getting 14.8% per year(?).
Your post says Banca Santa Cruz. It that misspelled? Bancas are betting parlours and maybe your friend was led to believe it was the same as Banco Santa Cruz. You did say something about it being written on a piece of paper - something a legitimate bank probably wouldn't do(?).
I get your point and agree that no bank in the DR is offering 14.8% interest APR/APY or otherwise. And that worse, businesses like ANOECA were/are allowed to operate as investment houses without proper financial safeguards/regulations.
But, is Banco Santa Cruz as legitimate as Peravia or Baninter was?
With one exception in 2003-2004 it was not a good idea to "invest" in peso cd's/bonds or any other instrument offered in the DR.
I understand that some who live there, "invest" in pesos securities, receive interest in pesos and pay monthly bills in pesos. They firmly believe they might have a good thing.......but the undeniable fact is the peso is likely headed for extinction.
In the 1980's, the peso was 1:1 against the USD......and it has steadily declined since then going from parity to being worth approximately two cents today, the exception period being the IMF bailout of the DR's Central Bank that was teetering on collapse in the banking crisis of 2003-2004.
As volatile as the US stock market may be, I prefer to invest there and earn equal returns, than invest in the casino that I believe the DR banking/finance area to be.
To my point, sadly, I am not sure there are any well operated/well regulated banks in the DR.....and that includes Banco Central.
Keep your money at home.....unless home is Venezuela....and if that is the case, then the peso IS a sure bet for your Bolivars.
Respectfully,
Playacaribe2
I get your point and agree that no bank in the DR is offering 14.8% interest APR/APY or otherwise. And that worse, businesses like ANOECA were/are allowed to operate as investment houses without proper financial safeguards/regulations.
But, is Banco Santa Cruz as legitimate as Peravia or Baninter was?
With one exception in 2003-2004 it was not a good idea to "invest" in peso cd's/bonds or any other instrument offered in the DR.
I understand that some who live there, "invest" in pesos securities, receive interest in pesos and pay monthly bills in pesos. They firmly believe they might have a good thing.......but the undeniable fact is the peso is likely headed for extinction.
In the 1980's, the peso was 1:1 against the USD......and it has steadily declined since then going from parity to being worth approximately two cents today, the exception period being the IMF bailout of the DR's Central Bank that was teetering on collapse in the banking crisis of 2003-2004.
As volatile as the US stock market may be, I prefer to invest there and earn equal returns, than invest in the casino that I believe the DR banking/finance area to be.
To my point, sadly, I am not sure there are any well operated/well regulated banks in the DR.....and that includes Banco Central.
Keep your money at home.....unless home is Venezuela....and if that is the case, then the peso IS a sure bet for your Bolivars.
Respectfully,
Playacaribe2
Who knows how financially sound Banco Santa Cruz is(?). My point just was that it is a registered bank with branches all over the country - as opposed to "bancas"(which is how the OP spelled it) which are nothing more than gambling houses that frquently also have loan sharking operations, and others like Anoeca that have zero regulation.
I agree. I think someday you'll see the DR adopt the USD as their official currency. All those nice little difference colored pieces of paper that come out of the ATH's are nothing more than monopoly money.
Banco Central is not much different than other 3rd world country central banks - better than some, worse than others, but it's bonds are just a step above junk rating. You can get similar interest rates on sovereign bonds in other 3rd world countries, too. The high rates are a "risk premium". You get premium rates for taking the risk.
Who knows how financially sound Banco Santa Cruz is(?). My point just was that it is a registered bank with branches all over the country - as opposed to "bancas"(which is how the OP spelled it) which are nothing more than gambling houses that frquently also have loan sharking operations, and others like Anoeca that have zero regulation.
I agree. I think someday you'll see the DR adopt the USD as their official currency. All those nice little difference colored pieces of paper that come out of the ATH's are nothing more than monopoly money.
Banco Central is not much different than other 3rd world country central banks - better than some, worse than others, but it's bonds are just a step above junk rating. You can get similar interest rates on sovereign bonds in other 3rd world countries, too. The high rates are a "risk premium". You get premium rates for taking the risk.
Confusing a banca with a bank is a common mistake for many new people coming to the DR. Hopefully, they learn the difference quickly.
DR's bonds have for as many years as I have been following them....always been "highly speculative" "Non investment grade"......known in bond circles as "Junk Bonds."
But why chase yield for so little reward? Likely because people see negative rates in Europe and low 2's on the US 10 year and think DR bonds are some how a dream come true.
But, its all good...until its not.....
Respectfully,
Playacaribe2
It's interesting perspectives here, so let me clarify some things...
1.) I misspoke earlier, I actually make 12%. But 1% is taken out for taxes.
2.) I've been collecting interest for around 13 or 14 years. My father did it before me. The peso has been losing its value, so obviously, you're not really making 11% or 12%, but more like 8% per year.
3.) Converting the interest back to dollars doesn't make sense. It's just another big lost. Its better to just leave it in pesos and use the interest to supplement your income here.
4.) It's risky to depend only on the interest for income.
5.) Using my interest here, I bought another car this year, a new motorcycle last year, and about 4 or 5 motorcycles in the last 13 to 14 years. Nothing extravagant, just used motorcycles and a couple of used cars: 2008 Jeep Wrangler (4-door), and a 2013 Ford Escape SE Ecoboost.
6. There is a real risk of the peso continuing to lose its value against the dollar. So, i don't recommend people to make this kind of investment. It's not like it was 8 and 10 years ago. So, when friends of mine ask me if they should do it, I'm like, I don't think its worth it anymore, and besides, the Dollar is so strong right now, why do it?
Frank
1.) I misspoke earlier, I actually make 12%. But 1% is taken out for taxes.
2.) I've been collecting interest for around 13 or 14 years. My father did it before me. The peso has been losing its value, so obviously, you're not really making 11% or 12%, but more like 8% per year.
3.) Converting the interest back to dollars doesn't make sense. It's just another big lost. Its better to just leave it in pesos and use the interest to supplement your income here.
4.) It's risky to depend only on the interest for income.
5.) Using my interest here, I bought another car this year, a new motorcycle last year, and about 4 or 5 motorcycles in the last 13 to 14 years. Nothing extravagant, just used motorcycles and a couple of used cars: 2008 Jeep Wrangler (4-door), and a 2013 Ford Escape SE Ecoboost.
6. There is a real risk of the peso continuing to lose its value against the dollar. So, i don't recommend people to make this kind of investment. It's not like it was 8 and 10 years ago. So, when friends of mine ask me if they should do it, I'm like, I don't think its worth it anymore, and besides, the Dollar is so strong right now, why do it?
Frank
It's interesting perspectives here, so let me clarify some things...
1.) I misspoke earlier, I actually make 12%. But 1% is taken out for taxes.
2.) I've been collecting interest for around 13 or 14 years. My father did it before me. The peso has been losing its value, so obviously, you're not really making 11% or 12%, but more like 8% per year.
3.) Converting the interest back to dollars doesn't make sense. It's just another big lost. Its better to just leave it in pesos and use the interest to supplement your income here.
4.) It's risky to depend only on the interest for income.
5.) Using my interest here, I bought another car this year, a new motorcycle last year, and about 4 or 5 motorcycles in the last 13 to 14 years. Nothing extravagant, just used motorcycles and a couple of used cars: 2008 Jeep Wrangler (4-door), and a 2013 Ford Escape SE Ecoboost.
6. There is a real risk of the peso continuing to lose its value against the dollar. So, i don't recommend people to make this kind of investment. It's not like it was 8 and 10 years ago. So, when friends of mine ask me if they should do it, I'm like, I don't think its worth it anymore, and besides, the Dollar is so strong right now, why do it?
Frank
And yours is a bit of a unique situation.
Having said that, there are still investable US stocks paying dividends equivalent to peso certificate yields with, in my opinion, less risk.
Different strokes for different folks.
And yes there truly is real risk of the peso continuing to lose value against the dollar as the Fed has begun to raise rates here, changing the risk reward equation to favor dollar investments.
Respectfully,
Playacaribe2
And yours is a bit of a unique situation.
Having said that, there are still investable US stocks paying dividends equivalent to peso certificate yields with, in my opinion, less risk.
Different strokes for different folks.
And yes there truly is real risk of the peso continuing to lose value against the dollar as the Fed has begun to raise rates here, changing the risk reward equation to favor dollar investments.
Respectfully,
Playacaribe2
There is also the real risk of the U.S. stock market and many other stock markets around the world going into a longer-term protracted decline. Mostly due to the unprecedented leverage that was taken to get them to where they are today.
In terms of dividends from stocks, those can be suspended or reduced at anytime. It is not as though they are exactly the same as fixed income.
There is a very solid reason why U.S. interest rates from T-bills to Notes and Bonds continue to dwell in the basement. Many want to use the convenient excuse that this is the result of central banking actors. One better hope that is the case, because the alternative is something similar to a hyper debt leveraged unwind.
Investing in $RD peso denominated paper with a currency that continues to devalue against the USD is not the best idea at even a 10% interest rate over a 7-10 year time frame.