5.20% CD terms 6mo to 10 years. too good to be true?

Quote from Trendytrader:

Transfer funds to a foriegn bank account. Term deposit=CD.

8.8% in New Zealand

http://www.bnz.co.nz/Rates_and_Fees/1,1184,20-188-521-2502,FF.html

http://www.westpac.co.nz/



How about Iceland at 14.45%

http://www.landsbanki.is/english/aboutlandsbanki/funds-accounts/interestrate-tariff/
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Go buy a house in America that you can see and own and live in it, that's the safest place your money can be. You will double your money in 10 years guranteed! Just calculate the yield on that....Thats what real estate has been doing for the last 80 years.

Going to ICELAND & NEWZEALND is not practical for small investors and you dont know the rules and laws of those countries and should anything happen trying to get your money in those countries can be a living nightmare..
 
Quote from dandxg:

Wow, that's quite a bit higher than the 5.25% APR that I get from Credit Union on a jumbo. Do you happen to know if there are any Catch 22's on banking in Iceland? I knew of NZ and Austrailia is supposed to be high.

I have seen rates this high in Serbia and Ukraine, but neither are considered stable economically therefore, I would never consider it.
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Now we have no place to go but SERBIA and UKRAINE? ICELAND AND NEW ZEALAND ? LOL Its getting ridiculous..

How about buying a home for your family in the heartland of America and double that in 10 years? Safest money keeping, you donot have to watch it, unless you are planning to burn it down and run a scam on the insurance, that can pay higher yields.

LOL! Fed rate cuts are working I am happy to know that.
 
Quote from dandxg:

Wow, that's quite a bit higher than the 5.25% APR that I get from Credit Union on a jumbo. Do you happen to know if there are any Catch 22's on banking in Iceland? I knew of NZ and Austrailia is supposed to be high.

I have seen rates this high in Serbia and Ukraine, but neither are considered stable economically therefore, I would never consider it.
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the catch 22 is very simple-you have to be either resident or citizen. they will not allow you to open account.same goes for rest of high rates countries. Russia paying 11-15% on cd's too. no debt,lots of commodities, backed by gold.
 
Largest Bank of Australia pays 7.60%.

Australia is a stable country and National Australian Bank is a publicy traded company so their financials are transparent for inspection.

I think they accept foreign deposits from USA. They don't require a local Tax ID to open an account but they will automatically deduct local taxes from your account if local Tax ID is not provided.

Not sure how the IRS handle foreign CD interest, you might end up with double taxation though and more headache on how to file foriegn interest income from a foreign bank with possible currency appreciation or loss.

But given that local USA banks are only offering around 2% on CDs, Australia term deposits looks attractive.

http://www.nab.com.au/Personal_Finance/0,,79017,00.html?urid=1206672347859
 
Quote from WinSum:

Largest Bank of Australia pays 7.60%. Australia is a stable country and National Australian Bank is a publicy traded company so their financials are transparent for inspection.

I think they accept foreign deposits from USA. They don't require a local Tax ID to open an account but they will automatically deduct local taxes from your account if local Tax ID is not provided.

Not sure how the IRS handle foreign CD interest, you might end up with double taxation though and more headache on how to file foriegn interest income from a foreign bank with possible currency appreciation or loss.

But given that local USA banks are only offering around 2% on CDs, Australia term deposits looks attractive.

http://www.nab.com.au/Personal_Finance/0,,79017,00.html?urid=1206672347859
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I'm sorry to report that Au banks are forbidden by law to accept deposits from foreign nationals unless you were to appear in person within 6 weeks of opening an account. I checked this out with two of the largest banks this week. ANZ and Commonwealth Bank. Interestingly, the Reserve Bank of Au will allow a foregin national to purchase govt backed securities, but on the application they specifically ask for your Au bank account and number for direct deposit of earned interest. Such securities are subject to a 10% tax with holding if you do not have an Au tax number.

"Hi again Mike,

To open an account in an Australian bank you must perform a 100 point identification check. This is the law in Australia and all banks are covered by this law. To pass this 100 point check you must be a temporary or permanent resident of Australia and have an Australian address. You can open an account in Australia but only if you intend to travel here. The account would not be activated until you arrived and performed the 100 point check. This is not specific to ANZ.

ANZ do have branches in other countries, but they do not offer the same account types as Australia and run totally independent financial systems.

Regards

Mick
Customer Service Consultant
Australian Contact Centre
Australia and New Zealand Banking Group Limited
Phone 13 13 14
Website: www.anz.com "

So if there is a way to do this please let us know as I would like nothing better than to have Au govt bonds, unhedged for currency risk.

Sincerely, Mike
 
Quote from dandxg:

Here is one possible alternative http://www.everbank.com/001CurrencyCDSingle.aspx?LinkID=Body1

The other would be to do positive carry trades in forex, but one would be obviously be subject to flucuations between currency pairs.
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Thanks for the link. But the fee for exchange as on the website is 1%, and to top this, the CD interest rate is 5.25%, a full 2.25% less than direct deposit in an Au bank. So it appears the cost of doing business is a full 3.25%. Hmmm, there's got to be a better option.

Don't take my word for it, check it out yourself. But my understanding is that by mutual tax treaty, the foreign tax with holding is treated as somewhat of a credit against your US tax on that income. You may not get it all back but most.

Thanks for the input. Much appreciated. There's got to be a way to do this with less of a hit.

Mike
 
Quote from HedgefundTrader2:

Go buy a house in America that you can see and own and live in it, that's the safest place your money can be. You will double your money in 10 years guranteed! Just calculate the yield on that....Thats what real estate has been doing for the last 80 years.

Going to ICELAND & NEWZEALND is not practical for small investors and you dont know the rules and laws of those countries and should anything happen trying to get your money in those countries can be a living nightmare..
More...

It’s could be a decent bet against inflation, but i somewhat doubt that you will double your money. you may, but only by amount of it, not by purchasing power. imo -most likely us house prices will stall or decline a bit, regardless to location. High inflation will do the trick. 5 years of inflation @ 10% rate will be equal 50% decline in housing prices and currently market betting in this direction
 
agree with kowboy.
everbank play may be worth to place a bet only if they have longer than 6 month CD's with Iceland. in all other cases imo only ever bank will be a winner
 
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