Dear forumers,

Since the previous thread was in violation of the rules, I'll open it up for for discussion.

What do you guys think of a AUD Savings plan with 20.22% returns in 3 years?

Currency risk wise, personally I feel AUD is quite stable and have been growing strong the past few years.

In the local front, I don't think ringgit is all that strong at all compared to other major Asian currencies, while globally, there's worry on US recession and economic slowdown which more or less, affects the rest of the world.


Disclaimer: This is not meant to be an advertisement nor advice, just for discussion only. For those whom want more info, it can be provided upon request.

how to open an Aussie FD then? u mean those foreign currency FD offer by local bank?

There's basically similar threads just that this is specifically mentioning on Aussie.

from previous to the most recent:
http://forum.lowyat.net/index.php?showtopic=465571
http://forum.lowyat.net/index.php?showtopic=512136 (longest discussion)
http://forum.lowyat.net/index.php?showtopic=600251
http://forum.lowyat.net/index.php?showtopic=602867 (some calculations and terms discussed)
http://forum.lowyat.net/index.php?showtopic=673996 (another technical discussion)

To summarize the concern is the actual "earning" after exchange rate and service charges whereby is it really worth it to park the money overseas rather than invest locally.

This post has been edited by b00n: Apr 22 2008, 03:32 PM

which bank gaves this FD plan?

There are similar thread, so threads being merged.

Hi cherroy,

Thanks for merging up the threads. I understand its tough work moderating the forums.

However, the AUD Savings Plan I am referring to is not really a Foreign FD account, but rather a Close Ended Guaranteed Investment Fund which can be an alternative to FD.

It works more like a Savings/Education Plan denominated in AUD. Hence the reason why I didn't post it up together with the foreign FD threads.

Here are some of the reason why its different:

1. It comes with Free Insurance Coverage of up to 125%.
2. It is Creditor proof unlike normal bank FD, where creditors can go after your FD money.
3. There's zero withholding tax. Normal bank FD above RM100,000 is subjected to 5% tax.
4. You may even get to enjoy Tax Relief up to RM 6,000 Life Savings/EPF as well as RM3,000 Education reliefts as its considered a life savings/education plan.

This is the closes thing you can get to opening a foreign currency account without having to pay the account charges.

There will be a newspaper advertisement on the News Strait Times on the 24th and 25th April, for those who subscribe.

Offer period is from 18th April till 19th May, 2008 subjected to a first come first serve basis. Offer may close earlier if the assets are fully subscribe.

Current assets available is AUD 7 mil only.

Meanwhile, the company is trying to get more assets approved, so that more people can get to participate.

Hope the additional info can be of help to those interested.

Thank. Best Regards.

Again, is the 20.22% a guaranteed return or expected return?
Also, is the 20.22% after the fluctuation of FD rates and service charges?!

Dear b00n,

The 20.22% is a Guaranteed Return.

Yes, you'll be getting back 120.22% net at end of 3 years period.

Thanks.

Best Regards.

Thanks for the information.

I will look into it. May I know which fund house is offering it?

The merger of you thread with forex FD seems a bit harsh. NVM, we consider it as Forex FD variant, so feel free to post futher information here.

Thanks. Cheers.

One thing i dun understand is if is GUARANTEED return, 20.22% pa, still got people want to go in stock market ? or put in normal FD? some risk must be there right ?

As said AUD current interest rate is 7% pa. So if you put 3 years FD of AUD, you can get 21% already after 3 years already.
Just you have to bare the currency exchange rate risk. So if AUD goes down, you lose on the capital depreciation side but if it appreciates then you gain extra.

Anyway, AUD is one of the strongest currency at the moment due to inflation in commodities as we knew Australia is one of the major commodities producers like gold, iron ore, wheat etc.

its not 20% P.A

its 20% after 3 year....

in another word its only 6-7% p.a

no much people get wealthy invest in foreign fd

This post has been edited by dr2k3: Apr 23 2008, 04:36 PM

Aus and New Zealand foreign currency FD seems to be giving good return rates...

i understand the risk of currency lost as well so anyone actually tried and confirm that the interest rates are for real?

Eg. Aus: up to 8.3% ...i asked my friend from Aus, now should be 7%...

@kevyeoh,
I believe there's an existing discussion thread on this - perhaps U could do a search. Unfortunately, my connection is 'timing out' so I ain't able to do the search for U

There are some existing threads already. Kindly proceed to the old thread to post. http://forum.lowyat.net/index.php?showtopic=512136&hl=

Thread merged.

Thanks.

This post has been edited by cherroy: Jul 22 2008, 09:35 PM

The interest rate is high but it seems like AUD and NZD is going down. Heard New Zealand is facing recession now. My question is:

1. Should one start to invest since the rates are lower now?
2. Should one withdraw if they have previously invested?

1. It depends on the prospect of the currency vs RM. If you think RM is going to be very strong, then no point invest in others currency as well.
You need to see the particular currency or country economy situation or health of the economy to determine whether it is suit to invest in it. Purely invest in rate alone might not generate return to you instead the yield getting might not enough to offset the depreciation of the currency. There are some currencies that offer double digit interest rate, but no people interested to invest in those either. You invest in some currency that is internationally strong.
Currency go up and down is a norm which largely due to economical cycle and timing of it differ from each others.

2. It depends what is the purpose of putting it in the first place. Putting Forex FD has one primary objective, diversification of asset and hedge against RM depreciation. Secondary is the yield differentiate. You need to see the overall and broader picture.

It is a long term investment, and mainly usefulness is diversification of asset and hedge against own currency depreciation.

i think foreign fd is not a feasible way of expanding your money's worth. it helps protect your money's value only at best. furthermore, the term 'fd' is misleading, because it doesn't take into account the change in currency rates are u interested in the new zealand dollar? need to first question why the interest rate is so high for the NZD in the first place ...

Hmm.. all your blog pix look better than your avatar pix anyway good point, why is the interest rate so high ?

attract investment in that country la...duh~

if anyone of you bother to do research n some calculation u wont post that kind of reply - -"

This post has been edited by dr2k3: Aug 12 2008, 08:46 AM