Thread: current interest rates for CD

Does anybody know what panama banks in general are offering on cash deposit at the moment.
I have sent emails to HSBC and banco general but no response yet (holidays)

Thanks

Tom

Ed Bower is the guy to ask , have not seen him on here for about a week , maybe he will see your post and reply , he is a great source of info in this dept

HSBC and other similar banks have low rates even in the best times(or rather the worst times which = better rates)
You can find info on the websites of a few banks, multibank for example.

Banca de Personas » Tasa de Interés | Multibank

Multi is about the 3rd largest Private Bank here, although they are one of the few that will handle Euro and CAD albiet at little or no interest. They have a nifty 3% savings acc (1k-25k, 2.75% 25k-50k)but their plazo rates have dropped by 1.75% on a 3yr in the last year. This is the same across the board for Panama banks after the gov bonds got an upgrade. So, with this as a baseline you can see you'll get far less than that with the larger international entities and a little more with some other smaller banks. The local credit unions offer better than twice those rates but at increased risk and only to residents.

Banco Gen. is looking identical

https://www.bgeneral.com/bgespanol/p...Fijo/index.asp

I guess Multi was a shakier institution a year back. Heard they lost a bundle worldwide in markets etc.

EdBowers is the man however.

excuse my ignorance but credit unions are riskier it what way, closing down or losing the money....I will become a resident but it looks like i have to deposit 300k in a CD, so i am looking for the highiest interest rate but most importantly the safest

It's a basic rule that if one institution is offering a higher interest rate then there is more risk involved. Exactly how much and what sort you usually can't say for certain. With a credit union, being a smaller institution and less able to absorb bad swings of fortune, could be that they rely on high interest housing loans and banco national has just come out with something that crushes them...who knows. Do the research on a place first. The accounts here are insured for 10k per acc, so I wouldn't do much more than that per named acc but the rates sure make you want to gamble eh? That's after you're in however, for your initial 300k I don't know. multi and general are ok. Global is offering 4% on 3yr which is decent. If you're looking at housing remember that discounts the amount needed.

Global Bank Corporation - República de Panamá

I had some trouble with them last year refusing accounts for foreigners. With your situation it may be different.

oh btw, forget email as a method of communication here. If you need something, call or go visit. It's a rare place that will reliably respond to emails.

lol still waiting for the bank to respond aswell as my lawyer on the residency thing

If you're looking at housing remember that discounts the amount needed. Sorry I dont get that bit

Thanks again

Hi, should have explained that a bit better.

You need 300k in total investments in Panama to show that you have deep pockets for them to rob later on. If you buy a house for 100k(or whatever the actual stated sale value is, usually less on the paperwork for tax reasons)it's an investment and you subtract that amount from the needed CD.
A house of that value or more also reduces the necessary monthly income for a Pensionado filing by $250/month.

I wouldn't say it's the best time to buy housing here, but just fyi.

a good story from the vistor newspaper .....From The Visitor, Panama’s largest tourist newspaper:

PANAMA CREDIT UNIONS OFFER HIGHER INTEREST RATES THAN BANKS

Every Panama credit union is regulated by the "Instituto Panameno Autonomo Cooperativo" (IPACOOP).

There are over 150 credit unions in Panama, some of them over 50 years old. The larger credit unions have as many as 100,000 members, and each member pays a monthly minimum deposit towards the credit union capital, which is generally from $5 to $10.

Since credit unions are tax free, non-profit organizations allowing all profits to be paid back in the form of interest to depositors, they are able to pay higher interest rates to their depositors than banks can.

According to some professionals in the industry, credit unions are considered to be more secure and less risky than banks for several reasons. One reason is that credit unions are limited to borrowing up to a maximum of four times the amount of their capital while banks can borrow up to 10 times their capital. This means credit unions have less exposure to lower economic cycles or high debt obligations. A second reason is that credit unions are regulated in the type of loans they can offer, so they are limited to loans within the parameters of their intended purposes, with the majority of loans under $10,000, and they usually require direct debit payments from the member borrowers’ salary, with collateral guarantees and multiple loan co-signers. Banks are generally more exposed to economic cycles due to large high risk commercial loans, international currency movements & global interest rate changes (LIBOR, etc.), many variables of which have bankrupted many banks around the globe in the recent global economic crisis. There has never been a credit union which failed in Panama while few Panamanian banks have failed, although not in recent years.

Currently, many credit unions are paying as much as 4% interest on basic savings accounts, up to 6% interest on educational savings accounts, up to 8% interest on 5 year time deposits (CD’s) of at least $100,000, and as much as 9% interest on retirement savings accounts. They can afford to pay higher interest rates to their depositors because they earn higher interest on their loans, and most credit unions have a very low loan default rate since they make small loans, require co-signers, and require direct debits from borrowers’ salaries for payments.

Although most Panama credit unions restrict membership to Panamanian residents that work in specific industries, such as educational professionals, medical professionals, or shipping professionals, there are some credit unions that do accept outsiders, and foreigners are often permitted to open accounts with those credit unions. The due diligence requirements are generally a valid passport, a second ID (like a drivers license), proof of address (utility bill), personal or professional references, financial references, documented proof of origin of funds, and a minimum deposit. Unlike banks that usually takes weeks to process new accounts, credit union accounts are usually opened the same day all documents are received and reviewed by the credit union compliance officer.

Many credit unions will also open accounts for Panama corporations or Private Interest Foundations. The corporate documentation requirements are generally a copy of the articles of incorporation (or foundation charter), certificate of incorporation, resolution of the board of directors authorizing the opening of the account and naming the authorized signatory(s), and photocopy of the directors and officers ID’s.

Similar to Panama banks, credit unions abide by the strict banking secrecy laws of Panama. The earned interest in credit union accounts and CD’s are tax free in Panama, with no necessity of reporting of interest income to the Panamanian government.

The only disadvantages of credit unions as compared to services provided by Panama banks are that most credit unions generally do not offer checking accounts, merchant accounts, credit cards, or online banking, so they are not setup for commercial business activity. Credit unions are generally intended and designed for personal savings and making personal loans to members, so they are generally limited to various types of savings accounts, time deposits (CD’s), and personal loans.

Panamanian credit unions are an appealing alternative for foreigners experiencing extensive and exhaustive documentation requirements and long delays attempting to open accounts in Panama banks. Credit unions are especially attractive to retirees who are seeking a safe, fixed income investment, since credit unions offer more competitive interest rates for savings, CD’s, and retirement accounts.

Originally Posted by nakedguydb

Although most Panama credit unions restrict membership to Panamanian residents that work in specific industries, such as educational professionals, medical professionals, or shipping professionals, there are some credit unions that do accept outsiders, and foreigners are often permitted to open accounts with those credit unions.

Great information. Two questions: What are some names of those accepting "outsiders" and would deposits in credit unions comply with the general requirements for depositing funds into Panamanian bank for purposes of the residency programs?

for EdBowers..
ciao,I'm interested in making a Plazo fijo of 300k for to get the permanent visa bajo solvencia economica.
I wondered if the bank issuing the certificate of deposit in the original?
and if there are different types of certificates of deposit.
thanksss friend

Does anyone know how to get a list of Panama credit unions, that states the years in business, assets, number of members, etc.?

Looks like there are 522 of them: http://www.ipacoop.gob.pa/site/wp-co...oop_activ1.pdf

I doubt the info you need is available - CACSA and COACECSS seems to hold 150 and 50 million each. Most of them will not accept foreigners or people outside the professional group.

They have quickly become more popular in Panama since they are not banks and probably are not covered by information exchange treaties.

Originally Posted by uncorkum

Does anyone know how to get a list of Panama credit unions, that states the years in business, assets, number of members, etc.?

COACECSS pays very attractive rates but I am wondering if they are safe. According to their website they first started in 1967. I suppose the risk would be if Panama has a crash in the real estate market similar to what happened in the US. CACSA is bigger and older but pays lower rates although better than the banks. In terms of opening a bank account, it is very easy to open an account once you have a cedula. In fact the banks more or less treat you as a national if you have a cedula even though technically you are still a foreigner. Once you have a cedula you no longer have to use your passport as an ID. HSBC and other banks pay very low rates so interest from a CD with them would hardly give you any income. In fact their rates are lower than inflation here in Panama. When I first came here I bought a Plazo Fijo (CD) from Banco Nacional in order to get my residency and they paid me 8%. Those days seem to be over but it was a great deal while it lasted.

One other thing that makes me a bit concerned about COACECSS is that they pay a commission to various offshore outfits who bring them new depositors. The other co-ops to my knowledge don't do this. Being extra aggressive about getting new depositors makes me wonder if they are making riskier loans or being a bit too aggressive with their loans. Also they are paying a higher rate than the other co-ops. Many US banks got into trouble because of their loan policies. I am wondering where one might get more information about the risk factors associated with COACECSS?

Originally Posted by robertb

One other thing that makes me a bit concerned about COACECSS is that they pay a commission to various offshore outfits who bring them new depositors. The other co-ops to my knowledge don't do this. Being extra aggressive about getting new depositors makes me wonder if they are making riskier loans or being a bit too aggressive with their loans. Also they are paying a higher rate than the other co-ops. Many US banks got into trouble because of their loan policies. I am wondering where one might get more information about the risk factors associated with COACECSS?

Can you give me a comparison of the rate of interest offered at COACECSS for a specified term and that presently available at a typical Panama bank?

COACECSS website is here:

COACECSS RL - Plazo Fijo

For example, $100,000 plus, one year CD is 7% for a non associate.

I think the highest rate you can get from CACSA for example is 5% for a five year CD (or plazo fijo as they say here). I asked them several months ago but I haven't checked with them recently. Banco Azteca offers 6% on a five year CD. They are a Mexican outfit that has been growing rapidly in Panama for the last couple years. They mostly sell appliances on credit and started the bank to finance their sales. Banco Azteca is only about ten years old but the parent company, Elecktra is over 50 years old.The thing is that many people including myself can't afford to risk the limited capital they have available. Inflation here in Panama has been running about 5% so if you get 7% you are only making 2% above inflation. If I was younger I would buy blue chip stocks such as Coca Cola that even though their dividends have low yields presently, they will increase their dividends gradually over the years. That doesn't help an old guy who needs income in the present to meet one's expenses. I am building some rental units on my property here in the hope that I can get 8% return on my capital. I figure that with inflation here in Panama the cost of building will probably double in the next five years so now is a good time. Of course in my case I have quite a bit of construction experience and I am also fluent in Spanish. In addition I have enough of land that I don't have to go out and buy lots at the present ridiculous high prices they are asking here where I live (Volcan). I am lucky that I bought 7 hectares on the edge of town in the year 2000 at a pretty reasonable price. It makes sense for many retirees that come here to rent rather than buy since many of them return to the states after a number of years. If they do and own a property here then they have a headache trying to sell it. Anyhow that is what I am thinking.

Holy crap! Those are incredible rates! Sounds a bit like Stanford though!

Keep in mind their loans start at 17 % per year for members and 20 % for non-members. Mostly with payroll deduction. The balance sheet is updated monthly on their website. It is completely non-profit - any gains will go back to the asociados.