Recently, a few banks are offering foreign currency fixed deposits with attractive rates e.g. New Zealand Dollars rates at > 7 % p.a. I would like to hear the comments of the pros & cons from members. Thanks.

which bank , pls be specific.

Public Bank is the recent one and I think the foreign banks have this also.

Public bank.

http://www.publicbank.com.my/en/en_content...content143.html

on the terms n conditions no.7:
The promotional rates apply provided that the FCY FD is held until maturity. We reserve the right to change the promotional rates and the foreign currency fixed deposit interest rates without any prior notice.

which means it can only change the rates after our maturity date ? or anytime they like?

This post has been edited by YJ...: May 31 2007, 03:41 PM

wow 8.7%, what's the catch. DO they charge like 4% service charge?

Sure, there is an exchange loss.

But long term, it is a good alternative. Rather you put your all money into ringgit FD which only yield 3.7% (might as well go lower in the future), you can set aside a portion unused money (that tends for FD rather han stock or unit trust) into some foreign currency that yield better also protect against ringgit depreciation. In longer term like 5-10 years time, the extra 2-3% will mean a lot.

But among the foreign currency, USD is least peferable since USD is on long term bearish trend due to huge current account deficit.

But you needs to at least monitor the invested currency, their country economy etc in order not to loss track on it.

MAS Currrecy is rising rite?
Still good to invest in New zealand dollar?

Then which currency would you recommend for a modest amount (say equivalent of RM100k)?

Who can tell the future ? currency is an artificial market, governments and people with really big money play with it a lot. Speculators attack it, governments support it, in the end there can be really wild swings sometimes. Using a foreign currency as a ringgit hedge seems to me to be a strange strategy because its entirely possible for two currencies to be attacked at the same time. I think you should maybe talk to a wealth management consultant (you can find them in most banks, you just have to prove that you actually have enough wealth to manage ) Also if you can check the historical prices at Oanda.com or somewhere, I think that can help you decide as well.

This post has been edited by wodenus: May 31 2007, 07:39 PM

Possible, but the chance and degree of ringgit being attacked is more than like Euro, AUD or SGD being attacked, people with plenty of 97 crisis experience will know. That's why BNM reluctantly to internationalise the Ringgit. Still Ringgit is untradable in overseas until now.

Although Ringgit current is appreciating, it mainly appreciating against USD, others actually not, if compared to AUD or Euro, Ringgit actually is depreciating.

It is no harm done to diversify your asset.

i interest on its...but can u all let me know what is the difference among the different bank offered??

i have make my simple analysis bout its...
Public bank got offer but at least must have RM10,000 to open account and valid till 30 Jun 2007
Hong Leong bank is RM8000 to open acc but dunno the validity period
UOB and Standard Chartered got offer but dunno the min deposit
CIMB oso...

i only have RM5000 in hand...so which bank u thnk can suggest for me??

Besides that, what is the difference among the different type of currency??
I found that NZD(New Zealand Dollar) offer the highest interest rate per year??
Secondly is AUD(Australia Dolar), thirdly is USD(US Dollar)...and so on...

ringgit worth nth ...it is like cheap currency~..not going any further..it doesnt have fundamental well to support it

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Added on June 1, 2007, 2:04 pmthanks forum starter to alert me on this, i think it is the way tat BNM lure foriegn currency to park the money in our banks `

This post has been edited by KVReninem: Jun 1 2007, 02:04 PM

anyone has real experience on this Foreign Currency Fixed Deposits? i wonder how much % we actually earn after deducted by the loss in currency exchange?

The total return = % interest + capital appreciation/depreciation

For long term the differential of 2-3% is huge, if you mean for short term then not so wise.
Also for someone intends to save the money for their children's future education in overseas like Australia, save the money into AUD FD is also hedge/protect against Ringgit depreciation in the future. I knew PBB not allow to withdraw it as foreign currency when the FD mature but some foreign banks allow you to withdraw as foregin currency and remit it to overseas for your children to reduce the exchange loss commission.

For exchange loss normally 1-3%, it depends and can negotiate lower with the banks if the amount is big. But if the particualr currency is the way up then the 1-2% charge seems like not significant can easily be covered by the appreciation.

But bare in mind, you can also suffer loss if the currency drop just like USD at the moment. The 5% interest in not enough to offset the capital depreciation.

This is a very simple concept.

Since now NZD interest rates is around the highest levels seen since sometime. The NZD currency is also very high now. If you noticed, only recently banks started to promote this type of savings account. Actually this type of accounts has been around for a very long time.

Currently my personal view is interest rates in NZD will be hike a maximum one more time. And from then on, interest rates will be cut gradually.

And this will cause the NZD dollar to depreciate against other currencies including the dollar and ringgit.

So actually say u keep this savings account in NZD for 5 years. You will actually break even or might even lose due to currency conversion lost.

Banks are very smart.....don't be fooled.

Cheers.

Yup, NZD is a bit high risk at the moment, also due to a lot of Yen carry trade which if unwinding could affect the NZD a lot.
Interest rate movement is depends on the particular country economy, inflation and policy strategy. NZD interest rate in near peak with current economy situation but whether it will lower or not, it depends on their economy performance and central banks normally making decision on interest rate depends on economy data from time to time.

Future is a difficult guess game, cannot say surely lose money or make money. Investment always carried more and less some risk.

It is always good for to diversify your asset or portfolio. Prior to 1997 crisis, less people are aware the currency depreciation actually can hurt quite a lot.

The foreign currency FD has been around 2-3 years after BNM starting to liberalise the banking industry.

Good explaination there.

A lot of ppl do not understand the financial products they are buying or getting themselves into until they LOST.

Hopefully they can see the bigger picture.

Everything in this financial world is related.

Currency to stock market to inflation to interest rates to employment and etc.