It might be interesting to watch the spread (ie. the difference between the selling and buying price. Remember you don't buy and sell currency at the same price. Usually if you buy a currency and then sell it immediately, you will lose some money, because the bank will always buy from you at a lower price than they will sell to you. This is another thing you have to consider. If the difference between the selling and buying prices (the spread) is 3%, then a FCFD that offers 8% will actually net you 5% (that's if the currency doesn't move at all.)

Different banks have different spreads, so that might be worth considering as well. Also with FC FDs you might be forced to exit at a bad time, ask them about that as well.

In order for an FC FD to work well, you must have :

(1) low spreads

(2) automatic, commission-free rollover

Then it might be a good deal (ie. your only risk is currency fluctuation.)

This post has been edited by wodenus: Jun 24 2008, 11:03 AM

Sorry but why contact you when I can contact PB directly ?

Yea indeed.. mostly they give out cheap trinkets. I've never seen a gift worthy of transfer yet.

Not one from GPS Bay lol Garmin is the king when it comes to GPS they're not giving away Garmins or I would have switched for sure

Also it's a gimmick, after one year your maps are not guaranteed to be accurate any more unless you subscribe



This post has been edited by wodenus: Jun 24 2008, 03:02 PM

Good point, but I think it only costs about 300 new but yea if you want to make quick money

Simple calculation, let's assume both currencies don't change value.

You put RM50,000 in an NZD FCD at 8.3% p.a for one month.

You buy NZD at Rm2.51 each, you get 19,920.81 NZD.

At the end of the month you sell 19,920 NZD at Rm2.42 each, you get Rm48,207.

You lose 50,000-48,207 = Rm1,793.

You gain (50,000*8.3%)/12 = Rm345.83

So at the end of the month, you still lose over Rm1400.

Simple conclusion : you don't make money, the bank does.

So the UOB one-month 8.3% p.a. deal is not a good one (unless of course you think that the currency is going to depreciate so much next month you'll actually end up making tons of money )

Put another way, the bank will charge you 3.58% to convert the money to NZD. The only way you will make money is if you put it in for at least one year. The one year rate is 7.70%, so you will make 4.12% per year if the currency doesn't change.

One year no-risk FD is 3.7%, so you will only make an extra 0.42% if the exchange rate stays the same. It's up to you whether you want to accept the risk or not. Just realize that you're not making like 4-5% more if the currency rate doesn't change, you're just making 0.42% more.


This post has been edited by wodenus: Jun 25 2008, 09:46 PM

UOB OTC (on-demand or OD) rate is 2.4240. I don't think they will give you the TT rate if you're not doing a TT.



However good the rate, the difference between risk and no-risk will probably never be the 4-5% that it appears at first glance.



If there's a forced conversion they're almost cheating people already

House loan, car loan... more than 2K already.

This post has been edited by wodenus: Jun 26 2008, 03:41 PM

Well if you're comparing no-risk and no-risk, 0.1% of Rm100,000 is Rm1,000

LOL so it did...



Price of food is artificial, it's government subsidized. Some parties are calling for an end to govt subsidies cos they're "bankrupting the country". So if they get voted in, the country will be rich but the people will be poor that might happen yet, so food prices might get very expensive. Still that's the least of your worries because housing is going to be even more expensive if you have a house already then fine, but you're still going to have to go somewhere to get food if they're not within walking distance.

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Added on June 27, 2008, 12:12 pm

That is true, but are they going to exit and then re-enter ?

This post has been edited by wodenus: Jun 27 2008, 01:15 PM

It's not about looks, it's about "the look"

5000*0.02 = a bit more than RM100 a year (because of compunding.)