My brother tells me bank savings accounts in Australia are paying 8+%.
Is there some way of tapping into that sort of return on our exchanges?
Best Answer
411 points
jester112358 answered one year ago …
Austrialia and Brazil are the strongest economies in the world based upon huge current account surpluses from commodity exports. They also have some major problems with inflation as we do and are countering these as we should too with higher interest rates to sop up excess money. I'm playing this by owning FXA, the Australian dollar FX ETF, which has a yield similar to banks in Austrialia as well as the currency appreciation you get when you convert back to US $ (hint: buy it and hold it until we raise interest rates significantly-the US$ has no where to go but down until we get our current account deficits under control).
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312 points
mjrenn answered one year ago …
Westpac in Oz is offering 8.4% for 24 months but thats probably for Oz residents.
http://www.westpac.com.au/internet/publish.nsf/Content/PB+HomePage
Th e following could give you a starting point.
http://www.investorsdailyedge.com/article.aspx?id=69
FXA is paying 6.67% at todays prices.
http://www.currencyshares.com/
3678 points
MNSL answered one year ago …
I think you should be very careful when you to try to put your money in some foreign countries.
I think some banks and funds have frozen funds worldwide including Australia. It is better to do thorough research before put your money in some banks and funds now.
Their balance sheet may be good for last 50 years. However, their current credit exposure has made them more vulnerable. Actually, some financial companies have gone to receivership now. Some already became bankrupt.
Lot of Mum and Dad investors and public have lost their entire life savings money due to mismanagement of some banks and financial institutions. They have lent more money in high-risk sectors such as property. In addition rather than concentrating to their core businesses, they are trying diversifying into other sectors that lack experience and knowledge. Actually, they are doing deworsification.
Finally, when they cannot perform in those areas poor savers becomes scapegoats in the expenses of other irresponsible market players. When they borrow, money they should realize those money belongs to public and they must try to pay back banks and financial intuitions.
699 points
7million7years answered one year ago …
My money is where my mouth is: in an Australian bank earning around 8% on 1 year 'CD' (a.k.a. term deposits). It's safe, secure, and in the current market, a great return.
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MNSL answered one year ago …
Further to my earlier answer, I like to add some more:
I can remember I read an article about an Australian Bank sometimes back. According to that article, some of their employees and investment advisors advised their clients to put their money in some funds to generate more returns. Finally, they could not withdraw these funds when they want as they had frozen their funds.
Therefore, I suggest we must do thorough research before we put our money in high interest fixed deposits in banks and financial institutions now. Even good institutions are facing problems with generating public deposits now. They have lost faith on the financial sector now.
http://www.abc.net.au/news/stories/2008/07/03/2293917.htm
According to above web site
Australian banks are actually more vulnerable to the credit crunch than many of their global counterparts because of their high levels of gearing, or loan to capital ratios.
"We're talking banks geared 25-30 times, whereas the global peers may be geared 15-20 times... even a moderate loan-loss cycle creates negative earnings," he said.
Please read following websites as well:
http://www.theaustralian.news.com.au/story/0,25197,23859384-17164,00.html< /a>
http://www.abc.net.au/news/stories/2007/07/06/1971840.htm
http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10498069 &pnum=0
http://cryptogon.com/?p=2745
http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10498295
120 points
Baskerville answered one year ago …
A1.While I am no expert on Australia, I think I should encourage you to read about the recent US amendments to foreign remittances and money laundering clauses bolstered by Patriotic Act.
After IRS hounded the Swiss Banks and their secret accounts (with "we won't be honoring your dollar instruments" threat) very few European banks are willing to take up customers resident in USA.
Even some foreign forex brokers have started removing "USA" from the country list on their application webpages- an indirect way to tell us that we are not welcome.
According to most of the legal articles I read, the current rules also seems to say "Unless proved otherwise, all Americans are money-launderers or terrorists-funders."
The onus of disproving we are not is on us.
I had a taste of all this new situation last month. A check from my daughter staying in the south took nearly two weeks to clear. I found that the banks' reporting requirements for domestic transactions have been drastically reduced to $500 - remember the days when it was $10000 and then $5,000 some years ago.
2. Usually deposits from foreigners are not insured by the domestic financial reserve systems even though some offshore banks may insure the same through private insurers up to a limit.
3. So, an American alternative would be what jester told above = ETFs sold in USA and preferably high grade bond ETFs.
4.Another option is Foreign Currency CDs issued by some banks like the Ever Bank in USA.
As always, we should read the fine print regarding risks, exclusions and tax-witholding.
B. A high interest rate may also be a nation's attempt to control inflation. So it needs to be seen what stage of economic cycle Australia is at this time, especially if the time-horizon is long-term.
