Hey, Some very close friends of mine who are quite wealthy have all their cash in these lebanese banks in US dollars. They have them in simple savings accounts that aren't even locked in. They are getting something like 6% return being in US dollars. I dont get it. They swear that its a super safe banking system bla bla bla. But it makes no sense to me. I've done a little researching and spoke to some people in the know, but I haven't gotten any satisfactory answers. Are there people here in the rate space who know how they do this and what the risks are?
if people you spoke to are in the know how come they don't know? what is bla bla? ever hear of etc. why don't you explain why they feel that it is super safe?
Well they are in the I think I know. They are originally from there but living in other countries. Some are execs and some are even execs in the financial world yet noone knows exactly how it works and what the risks are.
http://sberbank.ru/moscow/ru/person/contributions/deposits/ 3%+ in USD on MM accounts online accounts http://sberbank.ru/moscow/ru/person/contributions/contrib_online/ hey..how about south africa? http://www.absa.co.za/Absacoza/Rate...vesting-Accounts/Savings-&-Investing-Accounts why then you are asking people on ET about it? stick with those friends.do what they do and keep it quiet.
who are 'they'? i can invest in russian bank just fine. but i choose not to. first of all-you have to go there to open an account. that's counts as an expenses(which will reduce your returns significantly,unless we are talking about millions of dollars). i'm pretty certain-that's applies to lebanese banks too.just an example second -i'm 99% sure-you have to be a citizen of this country. or at least resident with very long list of requirements. didn't your friends tell you this? ask them,then come back and tell us the outcome.
It's more out of curiosity. They tell me that their deposits are as safe or safer then the banks in North America. I was arguing with them that it can't be if they are giving that high a rate. Also they aren't taking any currency risks as the deposits are in USD.I just don't understand how its done thats all. None of these people are residents. Citizens prob. I don't think the requirements are super long. Someone I know vacationed there and did it recently and said it was a breeze. Im assuming you have to go there to open the account. The travel expenses are negligible since the amounts are large.
Ok problem solved I checked out the banks credit rating on foreign deposits and its B1 and looks like the equivalents here trade at about the same yield.
higher the risk, higher the interest. You can also get a 3 month bond in brazil that pays over 11% right now.
+1 i can repeat this one more time...back in a day, in 90's(1995-96 to be precise) the rates on deposits in USD in russian banks was often >100% APR. in rubles-it was >200%. the question was-will you ever get your money back? i'm not saying that US banks are safer than lebanese,but i hope OP got the point. if it was so easy-why i'm keeping my cash at 1% in US,if i(and any other average joe the saver in us) can keep them in russia, in gvt own and guaranteed bank at 3.5+%?