Got two questions

1. How many banks do not apply 2nd tier rates. Afaik only citibank.

2. How many banks has FD with interim interest? and how many of them has interm interest per month basis on a 1 year contract.

crixalis

Yea what i'm saying is that AUD is strong now dont need to worry much about currency exchange risk. It's getting close to RM3.3.
By the way the link you provided is not working.

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Added on July 27, 2011, 7:48 pmSome rough calculation by the way,
Rate as of today Selling TT/OD 3.29, Buying OD 3.19
Therefore spread (I'm not sure if you call that spread) is around 3% which is greater than 1.8% so at the end of 1-year FD your interest yield would be 5.4%-3% which is ~2.4% (after you convert back to RM). Not wise after all... unless you go for long term... cos I see AUD appreciates slowly year by year.

If I remember the value of AUD increases like this
2002 2.3
2003 2.6
2004 2.7
2005-06 2.8
2008 2.2
2009 2.8
2010 3.0
2011 3.2

This post has been edited by Debuantu: Jul 27 2011, 07:54 PM

try this

https://www.pbebank.com/en/en_content/perso...eposits/fc.html

That's what I found as well. max is 5.45% not 6.7% as you said or did I miss something?

It is strong now thanks to the trade surplus to china mainly on coal.
Actualy economy is not in a good shape and hence the high interest rate trying to reduce spending.

http://www.rba.gov.au/statistics/cash-rate.html
FYI, AUD interest rate has always been that high for decades except during the financial crisis which was a bit lower. I don't think their economy is in bad shape. In fact back in 08-09 Aus was the least affected by the financial crisis.

Nice.

Its best you understand interest rate. Also go and check the banks average deposit to lending ratio in Aus. Its worse than the statistic shows as its being helped by foreign wholesale funding like debt instruments etc and I might add ppl like your goodself.

The pic that was shown by you is actually countries that are least affected by old money politics.

Aus also has almost a unfair trade with a lot of countries. Its either I owe you a lot or you owe me alot. To be fair they suppose to be trading equally.When unfair trade happens a lot of debt instruments will be made with the backing of your country economics.I have forgotten the name of the Swiss bank that handles this, and once met a guy who works there during a wedding. Its really interesting hearing him talk what actually happens behind the scenes.

China spending now has been the most interesting. They have been stocking up a lot of raw materials with the extra trade surplus they have to negate from any future issues. Thats basically using current extra cash to make sure the future holds bright.

So the big question. What has Australia been doing with their extra cash??

Its always a bad thing for a develop country to have high interrst rate. They are trying to encourage savings but with the high inflated living cost, its still not working yet. The reason for this is to increase their deposit to lending ratio.

crixalis

This post has been edited by cRiXaLis: Jul 28 2011, 10:35 AM

So what are you trying to tell? Aus is as shaky as US? Or Aus should have done what US did many years ago - reducing the interest rate which led to housing bubble and crisis?

This post has been edited by Debuantu: Jul 28 2011, 12:57 PM

1.Their currency strength does not reflect their economy
2.Learn reason for interest rate and it has nothing to do with housing bubble or the economy crisis
3.Stop reassuring yourself that you made a correct fundamental risk assesment when you bought and realize the real trurh on its currency price hike.

crixalis

Talking about foreign currency investmt here, if the currency is strong and the interest rate is consistent throughout the years i dont see the reason for not investing.
Also, one of the main factors that caused housing bubble and crisis was due to the reduction in interest rate, dont talk like i dont know history.

1) This I agree.
2) No matter how, the low interest rate of 1% indirectly create the bubble, eventually crisis.
Because low interest with liquidity flooding mean there is "huge force" on cash to "do something", and low rate always induce people to borrow more, eventually complacency happened.

3) no comment.

The us economy on housing bubble was not on interest rate.
It was majorly on leveraging deposits and future paper trading. They went to nonsensical levels. I know you know so good for you but its not that simple as to blame low interest. Keep it simple
Interest is for managing inflation period. Back to Aud, their currency strength does no reflect their economy. This is a biggie on basing on fundamentals

crixalis

This post has been edited by cRiXaLis: Jul 28 2011, 04:23 PM

If interest rate is low, leveraging cost is low too.

Interest rate, hard to find good return, so people find way to make better return.

If stock div yield is 5%, while borrowing cost is only 2%, it drives people to do leverage, can get 3% net return with free money, (you don't even need to fork out a single cent).

Same with properties.
If mortgage rate is low, people tend to buy more properties, eventually drive up leverage as well.
Mortgage rate is 3-4%, can you can rent out with 5% yield, people may say you are fool not to buy properties.

This pile on and on, and complacency happened, prime loan cannot loan out anymore, subprime also take.

If there is no 1% interest rate, instead 5%, there is less tendency of over-leveraged, and may reduce/minimise what had happened.
If there is 5% rate, it may drive some people to put money into the deposit, instead housing, leveraging derivatives.
Just like saving account now, mostly 0.1~0.2% across, most people now, do not bother to deposit money into saving account. It is like a useless account now.

We can say low interest rate is not direct culprit (the direct culprit is greed), but we cannot deny low interest rate is a strong or initial pushing force for leveraging.

the high Aus dollar interest rate offer is over, that is why you found the link wasnt working

does it mean is a good time to invest in foreign currency FD now?

maybank promo
1st month 3.1%
2nd month 3.1%
3rd month 3.7%

Not at their website.. is it at their branch only?

Advert in the Star today

how to invest in maybank fd?

Just open a FD account at your nearest Maybank branch