Dominican Certificates of Deposit

[voltage69]

Does anyone have any experience with dominican CD's in the banks? I was speaking with an ex pat who lives there now while i was over there and he was telling me they give rates between 13-17% in the banks there beacause they use the money to lend to the people and they charge the people like 50% interest on loans. If anyone has opened one of these cd's, how did it go? I even saw a sign outside a bank in cabarete boasting 10% on a short term cd. any info?

[Jimmydr]

The Ex President stole 10 Billion Dollars, from one of these banks and most of the people got nothing.

[Ingus_Khan]

An expat was telling me the samething but when he took someone down to open one they were only offering 5-6% because the US fed rate is only 0.25% and the DR rates vary with the US rates in general. I guess 6% is good relative to what you get with treasuries but when you factor in what Jimmy said and the exchange rate/country risks, not sure how good of a bargin it is unless you live there.

Let us know what you find out.

[voltage69]

Thanks for the info. I have someone else looking into it too. Said he has friends that do it, but he personally doesn't. will let you know what he reports back from them.

[MrHappy]

If you buy CD's in private banks, there is a risk that the bank could go under. There have been a few high profile cases here where bank owners ran off with the loot, as jimmy mentioned.

However, a CD in the Gov't bank, Banco Central, is not going to have that problem.

The rates were at 18% for 36 months in December, now they are substantially lower, and were lowered again last week.

[terrierist]

As of September 3rd, the Central Bank offers 8% on 36 month term CDs, evaluated in pesos. Interest is paid monthly, not compounded.

[voltage69]

well 8% is better than 2.. but then again a mutual fund here might do better at this point

[Jimmydr]

As of September 3rd, the Central Bank offers 8% on 36 month term CDs, evaluated in pesos. Interest is paid monthly, not compounded.


But without having oil or anything else of real value, you can loose your money one day.

[yayow]

But without having oil or anything else of real value, you can loose your money one day.


Damn feels kind of like you can lose your money anywhere, ask one Mr. Bernie Madorf about that! I think his new address (if you are interested in contacting him) instead of the penthouse on Park Ave. (where he used to live) is now a Federal Prison!

[Jimmydr]

Damn feels kind of like you can lose your money anywhere, ask one Mr. Bernie Madorf about that! I think his new address (if you are interested in contacting him) instead of the penthouse on Park Ave. (where he used to live) is now a Federal Prison!


In general, people are greedy. If you offered a return of say 20% today, you would be handed millions overnight.:eek:

[SrSuerte]

The Ex President stole 10 Billion Dollars, from one of these banks and most of the people got nothing.

Jimmydr shits on everyones parade. The hard truth! No candy coating! Thanks! I was almost interested.

[MrHappy]

Jimmydr shits on everyones parade. The hard truth! No candy coating! Thanks! I was almost interested.

No guts, no glory...

I've got BC CD's, and have done very well, thank you.

[Jimmydr]

No guts, no glory...

I've got BC CD's, and have done very well, thank you.


Sometimes you have to think abput why they are giving what they are giving, unless of course you don't mind going back to work at age 90.:eek:

[voltage69]

well from what the ex-pat was telling me, the DR banks loan to the people there at like 25% for lets say.. a new refrigerator or a bed for the family. so thats how theyre making their money. but they need the money to loan.

[MrHappy]

It's not that high now, but there was a time.. obviously, banks will always have higher interest on their loans to you, than what they pay on your investments.

But, as an example, I get 18% on my 3 yr CD's. whereas new CD's are paying much less now.

I could easily live on the income from my CD's if I wanted to, but instead, have them pay my mortgage every month.

My mortgage, BTW is at 13%.

[Jimmydr]

It's not that high now, but there was a time.. obviously, banks will always have higher interest on their loans to you, than what they pay on your investments.

But, as an example, I get 18% on my 3 yr CD's. whereas new CD's are paying much less now.

I could easily live on the income from my CD's if I wanted to, but instead, have them pay my mortgage every month.

My mortgage, BTW is at 13%.


How does that work? One guy gets 18% on his 100M and you pay 13% on your 100M.


Looks like the bank is loosing 5%?

[MrHappy]

If you look at the history of CD offerings, you'll see they have gone up and down. I bought when they were high, and got the loan from the bank when they were low.

Simple.

[tonymd]

If you buy CD's in private banks, there is a risk that the bank could go under. There have been a few high profile cases here where bank owners ran off with the loot, as jimmy mentioned.

However, a CD in the Gov't bank, Banco Central, is not going to have that problem.

The rates were at 18% for 36 months in December, now they are substantially lower, and were lowered again last week.

It sounds like a goood safe investment if you use the Central Bank, if I'm reading this right. I am thinking of putting a little money in , on my next trip to see how it goes?

[givengo440]

I was thinking the same thing if you use the Central Bank shit I need to get out of here!

[yayow]

If you look at the history of CD offerings, you'll see they have gone up and down. I bought when they were high, and got the loan from the bank when they were low.

Simple.


Timing in life is everything! Do your homework and get in at the right time and get out at the right time, by the way that is the history of the U.S. stock market too, look it up!:eek:

[mikelodge]

The Ex President stole 10 Billion Dollars, from one of these banks and most of the people got nothing.

There used to be a Bank advertising on Bankrate.com CD's at 8% last year plus when rates were at 5%. There website claimed they were part of a Swiss Bank yet Googling the Swiss Bank turned up nothing. The bank allegedly was in the Grenedines. When I called it I got a guy in his car on his cell phone. He told me he was the manager and they had just closed. I asked about the building and he said it was an office with only one teller since they did not do a lot of walk in business. Needless to say I persued it no furthur. Picture trying to track this outfit down.

[Jiggafied]

Well i gave the prince of Nigeria 2000 dollars and I'm still waiting for my 15 million.

[ricwilli]

Well i gave the prince of Nigeria 2000 dollars and I'm still waiting for my 15 million.

And here I thought I was the only one that got that email! lol

[Train Kept a Rollin2000]

Does anyone have any experience with dominican CD's in the banks? I was speaking with an ex pat who lives there now while i was over there and he was telling me they give rates between 13-17% in the banks there beacause they use the money to lend to the people and they charge the people like 50% interest on loans. If anyone has opened one of these cd's, how did it go? I even saw a sign outside a bank in cabarete boasting 10% on a short term cd. any info?

From what I've read here and on the internet, banks in the DR offer different rates on different types of accounts. For example, the 13-17% interest you were told about may likely be a peso account whereas the 5-6% mentioned above may likely be for dollar accounts. I've also read that the interest rate is tiered, meaning that the more you invest the higher the interest rate.

If I find anything else useful I'll come back here and post.

[husl2001]

From what I've read here and on the internet, banks in the DR offer different rates on different types of accounts. For example, the 13-17% interest you were told about may likely be a peso account whereas the 5-6% mentioned above may likely be for dollar accounts. I've also read that the interest rate is tiered, meaning that the more you invest the higher the interest rate.

If I find anything else useful I'll come back here and post.

Or, you can just go to the bank's website:

http://www.bancentral.gov.do/english/investment_instruments.asp?a=Investment_Certificates

[Jimmydr]

From what I've read here and on the internet, banks in the DR offer different rates on different types of accounts. For example, the 13-17% interest you were told about may likely be a peso account whereas the 5-6% mentioned above may likely be for dollar accounts. I've also read that the interest rate is tiered, meaning that the more you invest the higher the interest rate.

If I find anything else useful I'll come back here and post.


And where are they getting the money to pay 17%. Maybe printing it?

[Train Kept a Rollin2000]

Or, you can just go to the bank's website:

http://www.bancentral.gov.do/english/investment_instruments.asp?a=Investment_Certificates

WOW! And it's in English!!! Thanks!!!!

[givengo440]

I am on the site now thanks

[MrHappy]

And where are they getting the money to pay 17%. Maybe printing it?

Who cares? As long as I get my interest payments every month, I'm a happy camper.

Did I ever tell you I had one of the 30 month CD's that paid 52% per annum?

[Jimmydr]

Who cares? As long as I get my interest payments every month, I'm a happy camper.

Did I ever tell you I had one of the 30 month CD's that paid 52% per annum?


Thats what they said before they lost all their money with the prior President. Thats what they said with Madoff, until the shit hits the fan and all is lost.

[Gladiator]

Thats what they said before they lost all their money with the prior President. Thats what they said with Madoff, until the shit hits the fan and all is lost.

Madoff had his own 'proprietary trading system', or so he used to say... :rolleyes:

[WickedWillie]

Thats what they said before they lost all their money with the prior President. Thats what they said with Madoff, until the shit hits the fan and all is lost.

Who exactly lost their money under Hippolito? If you are referring to BanInter EVERY deposit, small and large, was paid back in full, thus being a main cause of the financial crisis here in 2003/4. No-one lost any money.

I also remember during the same period my Banco Central CD's at 60%+. Interest is paid monthly and they have NEVER failed to pay or been late with a payment.

IMO the only risk you have is exchange rate fluctuations. I bought my 1st Banco Central CD in 2003 at 35:1, cashed out this year at 35:1 so 7 years
with no capital loss but enjoyed between 35,000-75,000 pesos per month every month for those 7 years.

Also you could look at it as a social security program. The DR govt pays me, I pay the chicas, they use the money to pay their bills. No need for direct Govt assistance.

Perfect win-win situation!!!

[Jimmydr]

Who exactly lost their money under Hippolito? If you are referring to BanInter EVERY deposit, small and large, was paid back in full, thus being a main cause of the financial crisis here in 2003/4. No-one lost any money.




Is that a fact? I believe 10 Billion was lost or stolen.

[WickedWillie]

Is that a fact? I believe 10 Billion was lost or stolen.

Yes, it is a fact that depositors, large and small, got their money back. They were paid out by Hippo's govt thus leading to the DR financial crisis of 03/04 and there were some very large amounts (multi-million US$)being paid out. No FDIC limits here.

The executives without doubt embezzled huge amounts. Some have been subsequently convicted. Not sure if any served time or paid the $$$ back.

[WickedWillie]

More info here

www.en.wikipedia.org/wiki/Banco_Intercontinental (http://www.en.wikipedia.org/wiki/Banco_Intercontinental)


Fascinating stuff.

[psriches]

More info here

www.en.wikipedia.org/wiki/Banco_Intercontinental (http://www.en.wikipedia.org/wiki/Banco_Intercontinental)


Fascinating stuff.WOW!!!

great read!!!

[dunedain]

:iconTU:great info all around here. Wish I knew more about the Hippolitto (sp?) situation just for historical perspective.
Having already invested money in other countries in the past and currently. I too had some interest into some DR cd's but not without some prudent background work. But like most have already said, nesting these type of things over some years is beneficial.

[weyland]

And where are they getting the money to pay 17%?
Jimmy, you have spent enough time in the DR to know that money is typically lent out at 10% interest per month or 25% interest per quarter. This is by established "respectable" lenders, including one who is often mentioned on this board. (Street-corner loan sharks lend at much higher rates).

Also substantial security is required against such loans, typically property or goods worth at least double the amount of the loan, so even if property and commodity prices fall the lender is well covered if the borrower defaults.

That sort of income would comfortably allow the finance house to pay 17% per year to gringo investors. I am not saying there is not a considerable amount of risk or that people should invest anything they can't afford to lose, but at least the above explains how finance houses can go on paying that sort of interest year after year, in some cases for a couple of decades.

The mystery is why there is a continuous stream of Dominicans wanting to borrow money at such exhorbitant rates of interest, but no doubt the infamous Dominican short-sightedness and misplaced optimism has a part to play, as well as more murky issues of criminality and money-laundering.

[mikelodge]

Thats what they said before they lost all their money with the prior President. Thats what they said with Madoff, until the shit hits the fan and all is lost.

If our MN Buddy Tom Petters verdict comes in innocent tomorrow I could probably get you 20% and up for high enough amounts as long as they allow him to keep at least one of his planes from Sun Country Airlines. :lol::lol::rofl:

[WickedWillie]

The mystery is why there is a continuous stream of Dominicans wanting to borrow money at such exhorbitant rates of interest, but no doubt the infamous Dominican short-sightedness and misplaced optimism has a part to play, as well as more murky issues of criminality and money-laundering.

Historically it has been horrendously difficult for the average Dominican to get loans through the more traditional routes like banks.

Bank interest rates have been at a par with finance houses and the time from loan application to approval to actually getting the money has been from between 6 -15 months.

Compare that to getting the money virtually immediately and there is your answer.

In the last couple of years or so the banks have lowered interest rates significantly and have improved the loan process times.

Even with this the finance houses will continue to thrive as many Dominicans will never be able to get loans from banks as the collateral they can put against a finance house loan is of no interest to the banks.

[husl2001]

I make multiple deposits every time I go to the DR, usually followed by a withdrawal to another depository institution. Usually, I refuse to deal with the banks down there unless I have at least an 80% interest rate. :p:p:p

[tonymd]

From what I've read here and on the internet, banks in the DR offer different rates on different types of accounts. For example, the 13-17% interest you were told about may likely be a peso account whereas the 5-6% mentioned above may likely be for dollar accounts. I've also read that the interest rate is tiered, meaning that the more you invest the higher the interest rate.

If I find anything else useful I'll come back here and post.
Whats the difference between a peso and a dollar account. If I convert my dollars to peso and make the deposit, it would be a peso account right? Why would you want a dollar account?

[Jimmydr]

Whats the difference between a peso and a dollar account. If I convert my dollars to peso and make the deposit, it would be a peso account right? Why would you want a dollar account?


Well the peso was 50 to 1 once and went down to 33 to 1.

[weyland]

Whats the difference between a peso and a dollar account. If I convert my dollars to peso and make the deposit, it would be a peso account right? Why would you want a dollar account?
By many economic measures the peso is currently overvalued. It is being maintained at 36 to the dollar for political reasons rather than purely financial ones. Therefore those people who fear that the peso will be devalued sometime in the near future prefer to keep their money in dollars.

However, political reasons can be just as longterm as financial ones. Look at the infinitely more important question of the Chinese yuan which has been "wrongly" valued for decades according to those same economic criteria.

[questner]

I make multiple deposits every time I go to the DR, usually followed by a withdrawal to another depository institution. Usually, I refuse to deal with the banks down there unless I have at least an 80% interest rate. :p:p:p

Lovely. More on that please