www.CostaRicaTicas.com

Has anyone parked any serious cash in these foreign banks...Ive noticed when walking in Bank Cahty that the 6 months CD rates were 7%...The cambio rate for coloni was 495 to last week ...with BCR and Bank Nationale fluctuating 490-494 with cathy being at a stable 495....DR was 485 one night...ouch...other places in town were even lower....if you don't know where cathy is ,its one block from BCR from the corner where Morazon is walk past Papis next corner turn left its in the middle of the block....just a door no front...best rates so far...bring your original passport ....also open on Saturdays...
Id also like to know how safe these banks are....with new rules the US has imposed in parking money what are the advantages and pitfalls...I know you have to have residency or citizenship but are these banks willing to guide you through the paperwork...

You don't have to have residency or citizenship. But you will need an SA. Cathy will advise you on their reporting to the US government. They will also tell you the documents required to open an account.

Those are great yields... and the Colon is pretty stable against the USD. Not sure if Costa Rica is in compliance with the new Foreign Accounts Compliance Tax Act which went into effect in December 2012. When that is fully implemented, foreign banks will be required to report activity on deposits made by US citizens. In other words, any interest earned in a foreign account, held by a US citizen, will be reported to the IRS.

Joe........

When you asked about how safe the banks are, were you asking about being safe in compliance with CR and US banking and tax laws and exposure to currency fluctuations

Or you asking about the safety of your principal without the FDIC that we are used to in The States

I got the idea that you were fishing for opinions about the latter question. Does anybody want to speculate about that

CR is in compliance with the US Foreign Accounts Compliance Tax Act.I'd be interested to learn which country was not, absent Somalia and the like.

Only hearsay, but I understand that the US statute has made it almost impossible for a tourist to open an account in CR, and even very difficult for a rentista's and pensionado's to open an account. Rentistas/pensioners can chime in.

Re: the inurance, the Nat'l Banks (run by the govt) are insured but as to how much, I do not know. I think there are 3 total with some branches around the country but not everywhere.

I remember in the mid 90's one of the Nationals closed so I googled that just now and found this: "Banco Anglo Costarricense was closed by the Central Bank's examiners office in 1995 after incurring US$ 200 million in losses due to bad loans and dubious investments in Venezuelan bonds that subsequently disappeared. Criminal proceedings were successful against members of the bank's board and management, many of whom served prison sentences. Not one depositor lost money in this scandal". Sorry, I lost the link to this source and I have to run now but I recognized it as reliable.

The private banks which I think there are currently 11, their depositers are not insured but these private banks have to have assets in the form of CD's equal to 25% deposited in one of the national banks so that would probably provide some compensation. But despite that, why would anyone deposit funds in one of them? Big deposits, yep that would be stupid to me.

Small accounts, like household or small biz expense accounts? I asked two different fairly successful but common Ticos, so mind you this is all hearsay. #1: Convenience--there's usually a local branch for easy access in the towns where they live. Second, they said the Nat'l banks are a pain in the ass to deal with, especially waiting in long lines, so low risk on small amounts make the private banks appealing.

Lastly, on the rate for CD's I've noticed it is about only 3% for dollar accounts as opposd to much higher for colones accounts. I am sure members on this board who work financials can explain that alot better then me so I will abstain.

Thanks for your replies...I think Bank of San Jose is one of those banks from what I was told....as far as the rest I havent seen anything on their websites. Its just tough trying to find somewhere to park cash nowadays with the US banks paying their meager interest...

I agree. The CDTs at my financial cooperative in Colombia is paying in excess of 6.6%per annum.

You can open an account at bank of san jose as a tourist, a friend paid me to help him do it since my spanish is perfect. You will need a lot of documents, it is not something you will get done fast or without headache.

I will not speculate, I'll answer definitely - anytime you have the risk of currency fluctuations, you risk loosing money - I've seen the colonie go up as high as 560 or thereabouts.

Not something the average guy should be involved with - there has to be a reason dollar denominated accounts are paying 3% <bad, but 2 - 3 times what money market accounts in the USA are yielding > and colonie accounts are at 7%.

Also reread DonCarlos' post; very good, helpful info.

I'm not saying this to the OP, but just as a general comment:

When guys "discover" something that has been available for a long time (like foreclosures, foreign bank accounts, tax certificates, and so on), because its new to them, they get all excited - and while there is nothing wrong with an investment being a tad "exotic" most should stay away - the best yield in the world is useless if the currency you put up is devalued - and yes, it happens along with other bad stuff.

Have been thinking about moving to CR and getting residency. What gives me pause, in addition to security concerns it seems a bad deal financially. I see the inflation that has happened and continues in CR versus the low inflation in the States meanwhile the colon
appreciates, hovering around 500 and less. CR continues to overvalue their currency. Being on a fixed dollar-based income makes me shy about setting roots in CR. The CR gov't seems hell-bent to keep the colon where it is even though they have 8-10% inflation. I understand it is an economy that imports a lot and therefore the incentive to have a strong currency but at the same time the CR economic "miracle" has come about because it has been a cheap place to operate - but no more.

I have been considering the case of Argentina where the gov't overvalues the peso by almost 100 por ciento versus the blue-market price. Why is there no such blue market in CR? Maybe for Argentinos the risk of devaluation is so acute that they rush to put their savings in USD whereas Ticos have faith that the gov't will continue to overvalue the colon to make imports cheaper so blunting the effects of high deficit induced inflation. I really don't know crap about this stuff.

Here's some info on what I believe is one of "...the like". Interesting reading; act on it with considerable caution: http://www.nytimes.com/2013/12/15/busin ... =business&

_________________
"A man accustomed to hear only the echo of his own sentiments, soon bars all the common avenues of delight, and has no part in the general gratification of mankind"--Dr. Johnson
"Amen, brother"-ED

Thanks guys.... lots of great replies....there is no easy money any more....used to get 6% back in the day on CDS from BAC ....thinking it was in 08....I got on facebook Expats living in CR... they have good info on daily banking activities...Im still trying to digest some of this info and will plan my monetary movements accordingly.

In these world-wide historically-low-interest times, "parking" is exactly the term to use. Just as you pick a auto parking place with security and sanctity of the vehicle being paramount, the same with cash. Exotic instruments and opportunities abound...but security? Then when the atmosphere improves, you are so ready with cash money...Buy it, sell it but always have some fun with it and never but never let it make you crazy--I think Mr. Buffett and Mr. Bogle would agree.

_________________
"A man accustomed to hear only the echo of his own sentiments, soon bars all the common avenues of delight, and has no part in the general gratification of mankind"--Dr. Johnson
"Amen, brother"-ED

Good find Jazz.

How that country pulls it off is a marvel to me in this global age. How long they can continue is another q.

The Swiss, Panama, the Cayman's, others, all have caved and not like jumping for joy willingly.

I hear you but the thing is, Cooks Islands is a trusteeship of New Zealand which stands behind it fully ( Vanuatu may be another with a similar philosophy and laws https://www.cia.gov/library/publication ... os/nh.html). NZ with no great love for the US, is using this CI entity to subtly thumb their nose at the US (proxies are so fun and so deniable). Remember though those using any offshore entity are looking first and foremost for security of principal--money earned on money is distinctly secondary. "Parking" indeed>
PS None of the above is a mystery to all the Big Dogs nor their advisers or sundry govt. minions--it just brings this info to the masses--the process is very democratic and available to us snuffies (research the entities in the article for details).

_________________
"A man accustomed to hear only the echo of his own sentiments, soon bars all the common avenues of delight, and has no part in the general gratification of mankind"--Dr. Johnson
"Amen, brother"-ED