Can someone confirm this? I see lot of ads and sites over internet Are they local banks or international like HSBC, standard char....? And how secure is your money?
The banking supervisors in Panama have a list of those that do not actually have a banking license in Panama (click on "list"): http://www.superbancos.gob.pa/advertencia/advisory.asp Rates at "legitimate" Panamanian banks may be lower than in the US: http://www.bgeneral.com/bgingles/personal/plazoFijo/plazoFijo.htm One should do some serious due diligence before investing in anything promising an above-market interest rate in a foreign country ...
No recognized banks in Panama offer 9.5% for a one year CD. I have a 3 year CD giving me 6.5% with Banco Uno, thats about as much risk as I would accept here.
be careful ... my grandpa once bought some bonds or shares in a panama fishing company ... it either went bust or was a scam one day I will ask someone if the certificates are worth anything
In general Panama does have slightly higher rates than the U.S. which comes from the country risk rating (which over exaggerates the true country risk in my opinion). The spread between U.S. and Panama rates used to be a little bigger 5 years ago when I was making a comparison but that spread has narrowed a bit. I think the difference I was noting between U.S. Treasuries and Panama-issued debt was almost 200 basis points at one time but it is much less. If anyone is interested I can quote the current yields on Panama gov't debt. As noted above 9.5% for one year is well above the norm and probably risky even for a CD.
A 5 year Panama Note issued last November has a fixed rate of 6% and 1 year Note was issued at 5.37% this January.
That is way high and it is risky.Is there any way too see how long this "bank" has been working and does it have a license? Thanks
All I can ever think about is the times that governments have literally confiscated all funds in bank accounts in foreign countries - and it has happened too many times. Is is really worth the risk?
Depends on what you are talking about. Panama has never defaulted on government debt (even during Noriega/Invasion times) or done a Chavez nationalization type thingy and the largest banks there are quite safe and secure. So their CDs are pretty safe. (except for the 9.5% one lol) As for banks, their system is extremely safe and secure overall and the government is run very similar to that of the U.S. with sophisticated banking laws. The problem in Panama is that en route to becoming a major banking center, they made it is easy to open a bank so you do have some fly by night operations but the government has tried to crack down on that. If you stick with the main banks or local offices of well known foreign banks (HSBC, Bank of America, etc..) you will be fine. Most people would be surprised to know how safe and secure their banking system is despite their history. They generate a lot of business from the reputation as a finance center so they protect it pretty much. As for the 9.5% CD, that obviously smells bad and should be avoided. As with the U.S. look at the average Cd offered by top banks to get an idea of what the top quality market is.
Since we are on the subject, let's open it up to offshore banking havens in general. Used to be that the Cayman Islands, Lichtenstein (sp?), and a few others were considered great for rates, secrecy, but mostly tax free interest compounding (and tax evasion, or tax avoidance, depends on who you are - lol). But then they started cracking down on the whole "numbered account" scheme, started stripping away secrecy in Switzerland etc. So where does that leave the offshore banking system nowadays? Where is there a stable/safe/secure alternative to US that pays better rates but in US dollars or Euros? Anyone do offshore banking?