PBB FX FDR - so you don't convert to MYR upon maturity

Upon maturity of the PB FCY FD, it will be renewed under the prevailing PB FCY FD interest rate, ie. counter rates, without additional interest rates.


http://www.pbebank.com/en/en_content/perso...tions/fcfd.html

Hey guys, currently i'm working in maybank, so maybe i can offer some insight on this Foreign FD
in our bank, customers need to open a foreign account and then make a placement. one year rate 5.05% if im not mistaken. im not too sure if its the same with public bank, but lets say if u make a 1 month placement and the exchange rate not good enough, you can leave the money idle in the foreign account and wait till the rate improves. if the rate goes up alot, you can make a good amount of money
as for DCI, the minimum is rm250,000 and its a risky product. If you are planning on using the foreign currency, then its not as bad

anything questions, feel free to pm me

Yes. It is exactly the same with Public Bank.


The initial deposit with HSBC dual currency investment is a lot less than RM250k, if i'm not mistaken.

The risk is more or less the same with conventional foreign currency time deposit you mentioned earlier but the interest rate for dual currency investment is so much higher and the maximum tenure is only 3-month, if my memory serves me correctly. When the exchange rate doesn't favor you, you can always put the money in your foreign currency account held with the bank and only convert it back to Ringgit when the rate goes up. However, depends on how's the currency doing, the interest earned may be paid in Ringgit or in the currency you invested in.

Any monthly charges for maybank ?

I heard that PBB has monthly charges for maintaining the foreign account

Question to all the expertise here regarding forex fd. I would like to know about forex NZD. Is the currency now in its average benchmark price? I concern about this because i aware about the currency crash everywhere now especially in Euro and US. Will it be wise for me to put my saving of about NZD600K now for long term of 60 months or less because if not mistaken i read many times in this thread about forex fd the shorter the time in FD the higher the risk losing in currency exchange is that true? How about will it be wise for me to have the interest annually/quartely convert to MYR for my monthly usage or better have it reinvest? Which one will reduce the risk of currency exchange.

NZD normally correlated to AUD.

I would rather diversify in AUD instead all eggs in NZD.
AUD fundamental is stronger than NZD.

Interest rate for AUD and NZD is expected to rise further if economy does recover, so too long term commitment is not advisable. Just my opinion, I could be wrong.

None of move will reduce currency risk, it is nature of it and depended on one's risk appetite and comfortable level.
Even we holding RM, we still have currency risk on RM, whereby RM can appreciate/depreciate against others major currency.

Hmm, yalor, I have a lot of remaining Rupiah (many years liao) in FD earning 6.25% now (previously 8.5%-10% + chance to win prizes), wonder how can hedge the conversion rate. Rupiah is not exactly widely available in foreign FD in local banks. Any ideas?

This post has been edited by gark: Aug 14 2010, 11:36 AM

Isn't it usually the case that a curency's interest rate will go up when the currency's value drops, and vice-versa?



True, but we don't have to pay spread the buy or sell RM

Thanks cherroy.

I have asked some friends (not really expert but just their opinion) compare between these both countries Australia and New Zealand they said NZ is a much more stable and peaceful country than Australia. So if anything happen wars or any political thing NZ won't effect that much. So they advice me to actually go to NZ and put the money there then convert the interest back to MYR and enjoy quartely. After i read about the depreciation of currency i begin to fear. I am looking for something very stable because this will be part of my retirement plan. I found two bank in NZ which is Wespac and ANZ giving a rate of 6.75% for 60 months term deposit. I am not sure this is wise. I will be going to NZ on end of this month for this reason to negotiate for better interest rate that they can offer. Again before that i would like to know what is the best choice before i make a huge decision. I want to know what to ask also since i am not a financial expert. If i like NZ from this trip i might plan my migration there in the future.

Iceland was (and is) a famously peaceful and stable country. Interest rates were close to 15% a year. And then they almost went bankrupt.



Yes stay there for a few years, don't judge a country on the basis of one short visit. Tourism is one thing, immigration is another.

This post has been edited by wodenus: Aug 14 2010, 02:28 PM

You look at wrong aspect already if you want to invest.

For currency issue.
Several key factor we need to look at

1. Economy situation aka growth
2. Trade surplus/deficit
3. Gov surplus/deficit.
4. Strength of economy, size of economy.

AUD is actually more stable than NZ in vs RM
AUD is one of six major traded currencies in the world, while NZD is not.

While Australia has strength in resources, world major iron ore supply, as well as agriculture export.

You need to assess the situation yourself, there is no such thing of best option.
Every move come with its own risk.

i'm currently studying finance in australia and pretty well aware of the banking industry over here.

so if you do have any reservations/questions, do post them in this thread, i will try my best to answer them.

of course the usual disclaimer rule applies as i'm not providing any personal advice.

by the way, 60 months for just 6.75% is way way too much and unjustified.

you can obtain 6% with ease without any commitment i.e. withdrawal at your discretion.

these days, with internet banking, you can manage your funds at a click of a mouse.

Not necessarily so. In the case of the credit crunch in 2008/2009, key interest rates were reduced drastically across the globe mainly to spur spending.


You should take note of the tax rule in NZ.

Can i know what is your suggestion and advice?

---

Added on August 17, 2010, 4:29 pmAs i've told you i am a financial dummy. This is why i need to know the best solution for my saving and make the money work for me a consistent income every month.

I understand the economy strength for AUD is stronger than NZ. The only concern i have is the AUD will still continue to drop. Do you think this is the best time to put money in AUD? Will the currency have chances to still going down? If i am not mistaken the average benchmark price for AUD is 2.5.

---

Added on August 17, 2010, 4:39 pmI am not aware about this. This is why i want to take a trip there to talk to the bank officer directly. How about AUD?

After some advices here i have second thought to go AUD instead. But still need to find more.

This post has been edited by bubbl3t3a: Aug 17 2010, 04:39 PM

Average benchmark for NZD also 2.0-2.2
If AUD going down to 2.5, then 95% of chance NZD will also go down together. Both currency have strong correlationship.

Sometimes we cannot look back what is the rate in the old day, to say what level is cheap or expensive, things change.

Nobody will know which currency will go down or go up in the future.
Fundamental of particular country dictate the strength of it, which can change over time.

the usual disclaimer rule applies as i'm not providing any personal advice.

you are definitely, what they call a risk-adverse investor; unwilling to participate in risky products and made obvious with questions like Do you think this is the best time to put money in AUD? Will the currency have chances to still going down?

seeing that you actually have NZD600 grand to spare, i would definitely recommend that you first open a malaysian hsbc premier account (however it is likely that you already have one based on your previous statements). but always maintain that account to avoid hefty monthly charges.

then instruct your relationship manager to assist you to open an australian equivalent of hsbc premier account.

with an existing, recognised australian account, you are then exposed to an array to other financial products offered by other banks/financial institutions.

IMHO, bankwest typically offer very attractive products and is backed by commonwealth bank of australia (one of the big four). also bear in mind that these products are not precisely term deposits/fixed deposits and hence there is no commitment needed. statements in the spoiler below are quoted from bankwest's website.


yes, australian banks will yield you one of the best returns globally, but it is also extremely volatile. hence, if the AUD depreciates to a level unacceptable to you, you can always opt to transfer the funds from your australian hsbc premier account to the malaysian equivalent at your discretion with no commission or fee.

interests earned are non-taxable if total income earned is kept below AUD6000 per annum. further explanation of personal assessable income tax brackets can be found from the ATO website

This post has been edited by nokia2003: Aug 17 2010, 09:24 PM

Thanks nokia, this really help alot. I actually have my NZ visa done today but will change my mind to AUD instead as what all of you said here is quite true. I'll look into Bankwest.

I heard from another friend who follow the currency quite closely said Malaysia is trying to bring down USD back to 2.6 by end of this year. He said RM now is quite strong and by end of years will have 27 countries pumping in RM507b to Malaysia for investment. With this money coming in will surely make RM going up. This is why i am bit concern. If we can minimize losing/risk of course we'll try to avoid even though i know market is hard to predict.

hmmm... i don't really buy into such speculations. besides malaysia is a still a FDI dependent nation and i doubt that the central bank will allow us to lose such comparative advantages.

my motto is just to invest with the diversification as a motive and hence don't place everything in australia.

by the way, if you do have NZD600 grand to spare, you really shouldn't be asking such questions in a public forum; opt for a financial planner instead.

i will only answer to questions pertaining to maneuvers and financial products over in australia, as i'm not an expert and do not hold an AFSL.

all my knowledge has been channeled through my degree and hence it may differ in actual life.

This post has been edited by nokia2003: Aug 18 2010, 03:22 PM

I wonder why all looking for FD as saving/investment?

I will prefer Unit trust for saving/investment, of course for long term of period.

With UTC service you portfolio rarely had any chance to lost after 5 years.

There is several tactic available to minimize the risk and maximize the profit

now, that's the problem.

you are attempting to minimise the risk.

risk averse investors are trying to eliminate risk completely.

australian banks (and banks globally) are typically guaranteed by the federal government