Interest rates

[playacaribe2]

So the best is to wait to see how the peso will perform in the new future. But I know that it is not something you can count on. Yes I was just thinking of earning interest as a supplement to my retirement income.
What about US dollar investments? I'm guessing they don't pay as much interest.
Thank you for all the information, i do appriciated

The peso has lately been unusually strong vis a vis the dollar. How long that keeps up is anybody's guess.

While I am not sure what the dollar interest rate currently is for buying debt instruments like bonds of the DR, personally to me there are safer places with almost identical returns to what DR dollar bonds might pay. You can look to Dividend Aristocrat stocks, so called because they have increased their dividends for the last 25 years without missing a beat. Many of these pay 5% or above and with the possibility of capital appreciation of the stock. In the alternative are super safe US bank cd's and treasury bonds.

For an even higher yield, but with a little more risk, choose business development companies like MAIN. MAIN has been a rock solid performer for a decade with an annual dividend yield between 7-9%, some very nice stock appreciation and also paying additional supplemental cash dividends along the way

Lots of options for expats.

Respectfully,
Playacaribe2

 

[picurka]

The peso has lately been unusually strong vis a vis the dollar. How long that keeps up is anybody's guess.

While I am not sure what the dollar interest rate currently is for buying debt instruments like bonds of the DR, personally to me there are safer places with almost identical returns to what DR dollar bonds might pay. You can look to Dividend Aristocrat stocks, so called because they have increased their dividends for the last 25 years without missing a beat. Many of these pay 5% or above and with the possibility of capital appreciation of the stock. In the alternative are super safe US bank cd's and treasury bonds.

For an even higher yield, but with a little more risk, choose business development companies like MAIN. MAIN has been a rock solid performer for a decade with an annual dividend yield between 7-9%, some very nice stock appreciation and also paying additional supplemental cash dividends along the way

Lots of options for expats.

Respectfully,
Playacaribe2

Thank you very much for all the information
Lot to look into and think about

 

[cavok]

Yes I understand that. Wondering if US dollar investment would be a better option. But it doesn't have as high return Im guessing

I don't think banks offer dollar denominated instruments(?). Some corporations do. See post #7.

 

[picurka]

I don't think banks offer dollar denominated instruments(?). Some corporations do. See post #7.

Ok, thank you for all the information

 

[MariaRubia]

So deposit certificates in pesos for 3 months. Let say 1,000,000 pesos would pay 9% annual interest?

Yes probably. The banks publish their rates, but you can normally get a better rate if you ask the person who deals with your account - they call the central people and can offer you a better rate (at least that's how it's always worked for me)

 

[picurka]

Yes probably. The banks publish their rates, but you can normally get a better rate if you ask the person who deals with your account - they call the central people and can offer you a better rate (at least that's how it's always worked for me)

thank you

 

[Uzin]

One thing was not answered from OP posts, as in Canada we also have government guarantee client's money in banks up to an amount (£85k in UK I think) if the bank go bust..., does that exist in DR and how much is it...?

 

[cavok]

One thing was not answered from OP posts, as in Canada we also have government guarantee client's money in banks up to an amount (£85k in UK I think) if the bank go bust..., does that exist in DR and how much is it...?

No, they don't. However, in 2003 when when Baninter Bank went under, I heard that the government did make all the depositors whole but no guarantee they will do that again.

 

[playacaribe2]

One thing was not answered from OP posts, as in Canada we also have government guarantee client's money in banks up to an amount (£85k in UK I think) if the bank go bust..., does that exist in DR and how much is it...?

There is no such government guarantee at any of the DR banks.

As was noted the government has stepped in from time to time when they felt a bank was in danger i.e., Bancamerica, Banco de Progresso merged into Scotiabank, and in the case of Baninter when they collapsed they did make depositors whole although it took quite a long time. And noting further that the only reason that was allegedly done was because 85% of the deposits were in the hands of a few wealthy people. The former baseball player Sammy Sosa made quite a public spectacle of the mess, prompting the government to intervene......as it nearly collapsed the entire financial system in the DR....but for an International Monetary Fund bailout.

There is no real compelling reason that I can discern to keep large sums on deposit for any length of time in DR banks. That having been said, many of those banks are currently well capitalized...........but it only takes one event, extraneous or otherwise, to put things into a crisis as the Baninter mess clearly showed.


Respectfully,
Playacaribe2

 

[JD Jones]

No, they don't. However, in 2003 when when Baninter Bank went under, I heard that the government did make all the depositors whole but no guarantee they will do that again.

Large depositors got their money back; small account holders weren't as lucky.

 

[johne]

There is no real compelling reason that I can discern to keep large sums on deposit for any length of time in DR banks.

Respectfully,
Playacaribe2

IMO this says it all. There are so many alternates available paying high interest rates with decades of outstanding dividend payments.

 

[Big]

There is no such government guarantee at any of the DR banks.

As was noted the government has stepped in from time to time when they felt a bank was in danger i.e., Bancamerica, Banco de Progresso merged into Scotiabank, and in the case of Baninter when they collapsed they did make depositors whole although it took quite a long time. And noting further that the only reason that was allegedly done was because 85% of the deposits were in the hands of a few wealthy people. The former baseball player Sammy Sosa made quite a public spectacle of the mess, prompting the government to intervene......as it nearly collapsed the entire financial system in the DR....but for an International Monetary Fund bailout.

There is no real compelling reason that I can discern to keep large sums on deposit for any length of time in DR banks. That having been said, many of those banks are currently well capitalized...........but it only takes one event, extraneous or otherwise, to put things into a crisis as the Baninter mess clearly showed.


Respectfully,
Playacaribe2

Nicely said. If it was the golden egg, Wall street would be all over it.

 

[johne]

Oh, heck, it's a SOVEREIGN bond. What could go wrong,? How could the rating be hurt??
In the first lawsuit regarding Jet Set disaster the government (DR) was named along with the owner and his mother. Think 1st 300 million.

 

[MariaRubia]

Large depositors got their money back; small account holders weren't as lucky.

Oooh, hold on, let me put on my "completely shocked" face.

 

[johne]

As of today the sovereign bond has a Fitch RATING Of BB PLUS which is not that bad. So how many other families of the 200 plus that died will name the government and how successful will they be?

 

[playacaribe2]

As of today the sovereign bond has a Fitch RATING Of BB PLUS which is not that bad. So how many other families of the 200 plus that died will name the government and how successful will they be?

I have them at BB- following the Presidents withdrawal of his tax reform proposal in October 2024.

Suffice to say both ratings are speculative non-investment grade….affectionately called “junk.” To be sure they are considered better “junk” but “junk” nonetheless.

Respectfully,
Playacaribe2

 

[johne]

I have them at BB- following the Presidents withdrawal of his tax reform proposal in October 2024.

Suffice to say both ratings are speculative non-investment grade….affectionately called “junk.” To be sure they are considered better “junk” but “junk” nonetheless.

Respectfully,
Playacaribe2

As we say in Spanish they are junk más o meno.