At time being, AUD seems the better option.

There is not single currency to be classified as best selection.

When invested or diversify into another currency, the primary concern is about the health of economy of the particualr country.
The so called good option can change from time to time.

At time being, Australia economy seems quite ok and with commodities price seems firmer, as one of the most important commodities exporter in the world, AUD prospect is ok while with interest differentiate (4% current and expect to go up a few more basic point in the future), one earns more through AUD.

AUD is seems as a risky trade currency by the market, so when any crisis unfold, investors will flock to USD and dump AUD.

One good about AUD is that RBA is quite hawkish in general. When invested in a currency, you want the particular central bank to be the one pro-active to maintain the value of the currency, not the one hoping currency to depreciate to boost export.

Having said that, AUD is staying at elevated level at time being.
At 0.93 AUD/USD is a big resistance level.

I'm thinking of hedging against the ringgit too but I have no knowledge about this. Still haven't got time to read through this thread.

May I know how you're going to do that? Through local banks?

erm you have siblings/relatives, who is currently studying in the australia (and you do trust them), you can entrust them with your money.

some perks to that:

1. you have the full liberty to choose the local australian bank, preferred. for example, citibank australia is currently offering a whopping, massive 5.88% p.a. for the first 6 months (and bear in mind, that this is not a term deposit/FD). oh another example, bankwest at 5.51% and so forth.

2. students typically do not work, exceeding AUD6000 per financial year and hence your interest earned will not be taxed.

3. related to (2) above, each resident (including students) hold a tax file number (TFN). without this TFN, your interest earned will automatically be taxed at 50%. hence using this scenario, if you open a bank account from malaysia, using the HSBC premier service for instance, you will be taxed at this rate.

4. the reserve bank of australia (RBA) is committed to keep annual inflation rate at 2-3% and hence your money doesn't depreciate as quick as you would like it too. in malaysia, any announcements by the governmental to increase fuel price or reduce food subsidy et cetera, will send our inflation rates up the roof

5. the commonwealth (central) government guarantees your savings up to AUD1million per bank (however i have read that, the government is beginning to remove it away due to the fact that the economy is beginning to recover)


okay whilst that sounds all well and rosy, there are of course some obvious disadvantages to that.

1. the money is held under your sibling's/relative's name and hence there is a huge flight risk; you will not have much of a case if brought to court.

2. difficulties in bringing your MYR out of the country.

3. difficulties accessing your cash if you do need it. however with the visa/mastercard/maestro et cetera network, things can be quite easy (but with a cost)

4. the risk of exchange rate fluctuation (but you are exposed to such, if you open a local foreign account anyway)

This post has been edited by nokia2003: Mar 14 2010, 08:28 PM

Local banks almost all do have foreign currency account/FD, so this is the simplest way as starting point, instead of potential hassle to open account in overseas.

Another alternative is opening a time deposit account with an offshore bank such as HSBC International in Singapore/Hong Kong or Citi International Personal Bank also in Singapore/Hong Kong.

HSBC International Premier rates (1-year tenure) :
A$25,000 - A$59,999 > 3.31%
A$60,000 - A$119,999 > 3.37%
A$120,000 - A$239,999 > 3.56%
A$240,000 - A$599,999 > 3.87%
A$600,000 - A$1,399,999 > 3.87%
A$1,400,000 and above > 4.06%

Citi International Personal Bank Citigold rates (1-year tenure) :
A$26,000 - A$129,999 > 4.54%
A$130,000 - A$326,999 > 4.64%
A$327,000 - A$649,999 > 4.79%
A$650,000 - A$1,299,999 > 4.89%
A$1,300,000 and above > 4.94%

Citibank typically offer better rates nowadays mainly to retain existing high/super high/ultra high net worth clients as well as to lure potential new customers after the 2008 incident. You are qualified for the Citigold time deposit rates as long as you maintain your Citigold status in Malaysia. A minimal fee applies when you want to transfer the money back to your Citibank Malaysia account even if you're a Citibank Malaysia Citigold customer.

The best thing about HSBC Premier is that you can transfer your money in any offshore banking centres, be it Singapore or Hong Kong back to your Malaysia account online via HSBC online banking Global View and HSBC online banking Me-To-Me Transfer. You can transfer up to US$100,000 (or its equivalent) from HSBC International offshore back to HSBC Malaysia via hsbc.com.my. You may increase the limit up to US$1 million. Anything more than US$1 million, you will have to instruct your Premier relationship manager to do it for you. The best thing is that all this transfer is totally FREE !

You might also be glad to know that all the interest earned is totally TAX-FREE !

This post has been edited by MilesAndMore: Mar 14 2010, 09:11 PM

great information, MilesAndMore.

realistically, only a handful of malaysians can afford to allocate such an amount of money for the sole purpose of 'hedging'.

besides their rates aren't precisely attractive, even compared side by side with the local australian citibank and HSBC and worse the need of being locked down for a year tenancy.

however the great thing about these two options is, you don't have to physically leave the country.

---

Added on March 14, 2010, 9:47 pmif my memory hasn't failed me, my housemate (who on the HSBC premier) has conveyed to me, that there isn't any minimum amount required to maintain the australian HSBC premier account, provided the one in malaysia is kept at the allocated threshold.

he opened his account before arriving in melbourne and it has seems to be going well for him at the moment and still gets to enjoy the perks from the australian HSBC.

This post has been edited by nokia2003: Mar 14 2010, 09:47 PM

I remember this had been ages ago.
Like you open Premier Malaysia, HK & you can open another in Australia with little rain check if not mistaken.
They only care about the relation with your premier in Msia... tat`s far I know.

Dude, you been good ground info for me. Just about to do some homework for future.
Hate the previous GFC, didnt kill much of Aus market(carry trade+stimulus package= thats why 3.3 ), else will be a bargain time being.

This post has been edited by KVReninem: Mar 14 2010, 10:03 PM

alright, just got a few more information from my housemate.

basically, if you want to open HSBC premier account in australia (as in independent holder without a foreign HSBC premier account for example from malaysia and you satisfied their australian perquisite requirement eligibility), you actually have pay about AUD35 (figure uncertain, but in between the range of AUD30 or AUD40).

however if your HSBC premier account in australia is of a foreign HSBC premier account origin, then you are waived from this monthly transaction charge.

and i can quote a relatively old article from theage.com.au,


for this instance, only your HSBC premier origin matters here and hence relevant to most of LYN users, the malaysian one. in a nutshell, so long you can maintain the requirement in malaysia, you are exempted from this monthly transaction charge.

however, my housemate has also added, if your balance in the HSBC premier malaysia drops below RM200000 (intentionally or not), you not only have to pay the penalty fees in malaysia, but in australia as well. sounds fair to me IMHO, since it was free for you to maintain the australian HSBC premier account.

This post has been edited by nokia2003: Mar 14 2010, 10:40 PM

perks sound good actually for offshore account & does this effected by the ex rate changes?

like right now you see it at 3.0, sooner will reach about 3.4...
does it allow you to hedge in this matter? like hold at this rate of 3?

RM200000, quite a figure but its good against as long the bank dont run away with your money.

erm, the way i see it.

this account is not (really) meant to hedge your risks IMHO. because at the end of the day, opening a foreign current account (with CIMB for example) will also expose you to exchange rate fluctuations.

that is because you are aiming to earn one of best interest rates available to consumer market globally and yet well established financially i.e. australia. coupled with the fact, that RBA is able to regulate its financial institutions well (your money is in safer hand) and control the inflationary rates (your money doesn't lose its value faster than it is suppose to)

and i quote this from CIMB's website



hence if i construe the quote above correctly, you will still be exposed to exchange rate fluctuations.

from the HSBC premier point of view, i can pinpoint out three distinct advantages:

1. you can link and integrate the malaysian and australian (we will use both of these countries as an example, in this instance) accounts into one viewable account. this means that you are free to move your cash from/to one account to another at your convenience, 24/7 (both internet and telephone) and at your discretion.

2. you are free to withdraw money, at the local currency, without incurring any fees or costs, IF you are extremely desperate for physical cash.

3. you are free to select the products offered by the australian HSBC side; investments, savings, day-to-day accounts et cetera.

---

Added on March 14, 2010, 11:22 pmLOL, i didn't realise that i have typed so much until i took a minute to scroll up.

i sounded like i'm an HSBC agent trying to sell their products to LYN users

my most sincere apologies!

This post has been edited by nokia2003: Mar 14 2010, 11:22 PM

The main purpose of the majority of Malaysians opening an offshore account is the ease of moving your money around.



Besides the 1-year tenure, you may also choose the 1-month, 3-month, 6-month tenure and so on but the rate will be substantially lower than the 1-year rate.

The only currency that gives you a better rate on shorter tenure rather than 1-year tenure is the US Dollar. Both HSBC International and Citi International Personal Bank both quote higher interest rate for US Dollar time deposit for 6-month tenure only compared to 1-year tenure.



Exactly ! Things are even easier if you already are a HSBC Premier customer ! Basically you just leave them your contact at HSBC Singapore. Those guys in HSBC Singapore will refer your case to their colleagues in HSBC International in Singapore and very soon someone from HSBC International will call you. They will ask you to send them a photocopy of your IC and passport. They will then process your application and you shall receive the welcome package in a week time.

Please note that HSBC Singapore and HSBC International and completely different entities and people working there report and get orders from different bosses. The HSBC International office is located in the same building as HSBC Singapore HQ but those people working in HSBC International will report everything back to HSBC UK and not HSBC Singapore.

This is the same in HSBC Hong Kong and HSBC International in Hong Kong.



Correct !


Yes. This can also be done in HSBC USA, HSBC UK, HSBC Canada, HSBC Hong Kong, HSBC Taiwan, HSBC Singapore, HSBC International offshore etc.





This thing only started in year 2007. The previous HSBC Premier membership did not offer their clients this kind of perks. Standard Chartered is copying all these and offer more or less the same perks as HSBC Premier with their Priority Banking but Standard Chartered is no where as big as HSBC.

The other one is Citibank CitiGold. As long as you maintan your CitiGold status in Malaysia, you'll enjoy the same service and get a CitiGold special time deposit rate should you decide to open an offshore account with them in Singapore or Hong Kong. Citibank started this in late 2008. So, HSBC actually is the first one to offer this kind of service and overall, it is still a lot better than Standard Chartered Priority Banking and Citibank CitiGold.


Please take note that if your total net worth in HSBC Premier Malaysia falls below RM200,000, you will be charged RM150 per month and you will be given 3-month to top-up your fund. Should your total asset under management in HSBC Premier Malaysia is still below the required RM200,000 after the 3-month grace period, they will kick you out of HSBC Premier.



For currency hedging, usually your banker will advise you to play dual currency investment. This kind of investment is designed specially for this purpose.


They won't run away with your money. You will only loss your money when they go bankrupt which is a highly unlikely scenario because the government won't allow it as it poses a systemic risk to the global economy and many people will be affected. Citibank and Bank of America are both very good examples. Besides, a lot of people have a lot more than just RM200,000 with banks like HSBC, Citibank etc.


Spot on !!!

Another advantage is that you'll be given a complimentary credit card in anywhere you hold a HSBC Premier account. It is very common for a US citizen who is a HSBC Premier client to hold several credit cards issued by HSBC from several different countries such as HSBC Delaware USA, HSBC Canada and HSBC UK etc.

This post has been edited by MilesAndMore: Mar 15 2010, 01:09 AM

@ MilesAndMore

thanks a lot for filing up the gaps for me there. appreciate it!

my knowledge is scarce because i don't actually own/use a HSBC premier or citigold account; mine is based on listening and reading,

No problem

Savers' sorrow: Term deposit rates fall despite RBA hikes

LOL. sorrow or not, your funds (including mine and most of the peeps in LYN) originate from malaysia. hence even with the allegedly lower interest rates, you are still better off than the local market.

---

Added on March 15, 2010, 10:51 amcurrent rates as of 15/03/2010; taken from theage.com.au

savings accounts


term/fixed deposits


This post has been edited by nokia2003: Mar 15 2010, 10:51 AM

Thx you all for your answers. I have been busy lately and don't have time to go through and digest all your responses.

Just finished work at 6 pm just now.... tired....

Anyway, will find time to read the replies. Thx again.

Note : Now no money to put in foreign FD either....

AUD has been steadily dropping from 3.08 to 3.065 (based on money exchanger rates and not bank's)

investors, filling up education funds et cetera, should really keep their eyes steady for next few weeks.

one thing that's not mentioned but is crucial in opening a foreign currency deposit is the exchange rate spread, i wanna ask, for Citigold and HSBC Premier, when you open an AUD deposit, what's the forex rate that they quote? is it the same as other banks' published board rate or do they offer you a better rate?

because if you exchange at say for example Maybank's forex counter rates, the spread is about 8 AUD cents, so if you buy at 3.08 AUD100k, as opposed to a more favourable 3.05, you're spending RM3000 more to buy the same amount of AUD



anyway, for me personally, i finished my studies in Melbourne last year, so i've got a few bank accounts in Australia, i closed all but NAB's and Raboplus, as NAB's division UBank offers the highest ongoing savings interest rate, and Raboplus offers pretty competitive rates as well
i'm getting 5.95% for my UBank USaver

so what i did was transfer some money from Malaysia to my bank account in Aus and park my money for the high interest rate, and i converted at a favourable forex rate

the problem is though technically both UBank and Raboplus stipulate that you have to be an Australian resident for tax purposes to hold accounts with them, i suppose at the time i opened i was one and i'm not clear on what happens if you cease to be one, i'll just pretend that it's ok to keep them, as i do keep a postal address in Australia

as for my NAB account my address is my Malaysian one and it's ok for foreigners to open bank accounts

so if you have a large sum of money and you intend to invest in AUD, perhaps it's better for you to fly yourself to Australia and open a bank account there, because the better interest rates you can obtain there would cover your flight there provided it's a large enough sum


by the way the information provided by theage.com.au is kinda misleading because most are introductory rates where they only last for the first few months upon the opening of accounts and thereupon which rolls back to the lower standard variable rate

a fairer comparison would be here http://www.raboplus.com.au/savings/high_in...gs/compare.aspx for standard variable interest rates

for starters, it is hard to find banks offering the same exchange rates.

number two, for the HSBC premier account, we have been discussing a completely different 'maneuver' for the last few posts, in which we are opening a malaysian HSBC premier account and then opening an australian equivalent thereafter (and hence another set of BSB and account number) and not via foreign currency deposit.

and with the australian HSBC premier (alongside the BSB and account number), you can then opt for your preferred method to transfer your funds; purchasing a bank draft or requesting a TT from your favourite local bank or if you are keen to obtain better rates from your local money exchanger booth; physical cash.

i did ask my housemate with regard to withdrawals on his australian HSBC premier whilst he was in malaysia for his summer vacation recently. he used his australian debit card to withdraw MYR from a local HSBC ATM and he was not charged for using the facility and the rate quoted was pretty competitive (according to him, of course)


erm, come on. it is just another way to conduct business.

as the term 'introductory' actually implies, it is an introductory perk to entice you to open a new account with the respective banks. same concept with credit card providers (with their zero interest balance transfer for a few months et cetera). surely that is crystal clear?

besides, there are actually tabs, for clarity purposes on the said website.



This post has been edited by nokia2003: Mar 20 2010, 11:28 PM

Not too familiar with Citibank Malaysia CitiGold service. Dad does have a CitiGold account overseas but he can't comment much as unlike HSBC Premier, the services offered aren't standardized.

For instance, being a Citibank USA CitiGold customer doesn't entitle you to much perks as it does in Citibank Singapore. Hence it is nothing to shout about if you're a Citibank USA CitiGold customer as there are too many of them. In USA, Citi Private Bank is the exclusive one that will get you many freebies. Many many years ago, one can be a Citi Private Bank customer as long as he/she has a liquid assets of US$3 Million deposited with Citibank but this has since changed. In order to qualify now, you need to have a minimum US$10 Million cash with Citibank USA.

Anyway, back to your main question. HSBC Premier customers do get special rates which they guaranteed will be lower than standard board rates. If you do the transfer at the branch, you will need to inform your relationship manager prior to doing so. But if you do the transfer yourself through online banking, you'll automatically be given the better rate.

For the latest foreign currency board exchange rates, you can check it out yourself through your online banking account on the left menu. The special HSBC Premier foreign currency exchange rates are not published but rest assured that the rate you'll get will be better than what quoted in your online banking account.


Another way of minimizing your loss in foreign currency exchange is to open a foreign currency account with HSBC Malaysia. HSBC Malaysia doesn't offer a single foreign currency account. What they do have is called "CombiNations Account". Basically it is what other banks call "foreign multi-currency deposits". It is an all-in-one account that offers you deposit service for several major currencies such as USD, EUR, GBP, CHF, AUD, SGD, HKD etc.

Let say you want to remit some money from HSBC Australia back to HSBC Malaysia, you can transfer the money from HSBC Australia back to your HSBC Malaysia "CombiNations Account". Put it there a while and only exchange it back to RM when AUD is expensive