Term Deposit of 6.50% with RaboDirect?

Banano · Post by **Banano** » March 30th, 2012, 3:10 am

At RaboDirect your deposits are guaranteed by our ultimate parent Rabobank

From 1 February 2012, Deposits with RaboDirect are guaranteed by the Australian Government up to a combined total of $250,000.

Rabobank has been ranked one of the top 10 safest banks in the world by Global Finance magazine; it is also bigger than any Australian bank. So you know your money is in safe hands with us.

http://www.rabodirect.com.au/term-depos ... WT.svl=hdr

What do you think if i sell off my real estate , term deposit with RaboDirect , move to Thai or PH and live off the interest and forget abt anglosphere or still keep on working and saving?
This is one of the safest banks in the world and interest rates they offer are prbbly one of the best.

How would I do with abt 1200-1300 AUD per month in Thailand, PH and how abt Ukraine/Russia?

Do you guys think this is wise idea?

Contrarian Expatriate · March 30th, 2012, 4:18 am

That's not quite enough of an interest rate even though it blows US rates out of the water. You still have to pay US taxes on the interest and you must file your FBAR report every year.

I'd say look for higher rates abroad in the developing countries. True, they might not have the same government insurance behind them, but the risk is worth the reward in my view if you spread the money between a few banks and you choose the most solvent and well-known banks.

Also, term accounts don't tend to pay interest each month. Many pay a lump sum at the end of the term which would impinge your continuous cash flow.

emh · Post by **emh** » March 30th, 2012, 4:45 am

It looks like the OP is an Australian Citizen, not a US citizen. And even for US citizens, if you spend something like 330 days a year outside of the US, about $90,000 is exempted from taxation.

That being said, the amount of interest you receive of that account depends on how much you deposit and how long you deposit it for. There's a "calculate your rate" link on the right hand side on the website.

As for whether $1200-1300 per month is enough to live on in the countries you've listed, that's impossible to answer. Really depends on your lifestyle, what city you're living in, etc. There are millions of locals in each of those countries who live on far less so obviously it's doable. Just depends on what you want from life.

Banano · Post by **Banano** » March 30th, 2012, 4:51 am

Contrarian Expatriate wrote:That's not quite enough of an interest rate even though it blows US rates out of the water. You still have to pay US taxes on the interest and you must file your FBAR report every year.

I'd say look for higher rates abroad in the developing countries. True, they might not have the same government insurance behind them, but the risk is worth the reward in my view if you spread the money between a few banks and you choose the most solvent and well-known banks.

Also, term accounts don't tend to pay interest each month. Many pay a lump sum at the end of the term which would impinge your continuous cash flow.

RaboDirect is safe and they pay you off monthly, quarterly, half yearly or yearly
Im in AUS to id be paying abt 1500 tax a year on 16-17k profit, besides id be out of country so i wouldnt worry abt tax

Did bit of research and came accross this website

http://term.deposits.org/1-year.html

site compares different rates from diff countries

A bank in Vietnam has staggering rate of 14% followed by some bank in Ukraine 12.5%....its all in their own currency and tht is the problem, also how stable and safe these banks are is another thing. If they are backed by their governments would be better, I cld live like a king in Asia on that interest

Of course i would invest in a few banks just in case, something like 70% of capital in a very safe bank and 30% in high interest 3rd wrld country bank

Can bank in vietnam and ukraine be trusted with money?

Banano · Post by **Banano** » March 30th, 2012, 5:04 am

Id have about 220-250K AUD after my company pays me off redundancy package, dogs offshored jobs to India

Now it would be nice to get 14% interest on that money, that would definately be more than enough to live anywhere however safety is important when it comes to $$$

Im happy to live in 1 bdr apprtment, 3 meals a day would be nice, just normal lifestyle I guess,stay away from tourist areas and hookers of course..would be no need for that anyway

MrPeabody · Post by **MrPeabody** » March 30th, 2012, 10:14 am

Looks like a really good deal compared to the 1% you get in the US. Also, having Australia dollars is a good idea, since Australia has natural resources and their dollar tends to go up as the US dollar goes down. One thing to check the Australian inflation rate compared to the US. Do they accept US citizens? Is this a real bank or an Internet bank?

Contrarian Expatriate · March 30th, 2012, 4:08 pm

emh wrote:It looks like the OP is an Australian Citizen, not a US citizen. And even for US citizens, if you spend something like 330 days a year outside of the US, about $90,000 is exempted from taxation.

That exemption does not apply to interest income since that it UNEARNED income. The tax exemption you speak of applies to EARNED income. Any and all proceeds from bank accounts would therefore be subject to US federal tax.

I cannot emphasize enough that those considering moving money abroad this way should consult a tax attorney so that they do not run afoul of the IRS which could care less if you were simply unaware.

Specifically, the FBAR report for those who have any foreign bank assets over $10,000, the Form 8938 for those who have over $50,000 overseas, and any other requirements that I might not be aware of. The IRS is snagging more people each year.

http://www.globaltaxhelp.com/fbar-new-enforcement

Mr Average · Post by **Mr Average** » April 1st, 2012, 8:59 pm

Im in the same predicament as you OP. Got $120k in Ubank earning $7k a year and another $150k in shares earning $8k a year. If I sold my house I'd have another $400k bringing my total passive income to around $35k.

I'm over working, I don't need that stress in my life anymore. I just want to go overseas and live well in cheaper countries. But the thing holding me back is all my family are in australia and peer pressure (ie. all my friends are working and telling me I'd be crazy to throw away my career, etc). Not sure what I'm gonna do yet. All I do know is I'm not gonna be a wage slave all my life and im sick of all the feminism and political correctness here, among other things.

Anyway, it'd be great if you could keep providing updates, etc on what you end up doing.

Banano · Post by **Banano** » April 1st, 2012, 9:16 pm

35k passive income..wow...with that money you cld be living like a king in 3rd world countries, thats 3k per month, 100 bucks a day:)

I wouldnt waste time if i were you, you could term deposit 80% of your capital and have the other 20% to try some business in foreign country. You are in no rush, you dont even have to be in one place with that money change country every 6 months:)

My situation is a bit different as I dont have as much money so it limits my options

RaboDirect is internet bank i think, Duch bank rabobank is parent, one of the safest.

I have another option to rent my place out and have some 1000 bucks per month and after you pay rates,body corp,property managemnt fee to agent its abt 750 clear...thats not much
If i sell the place i could get abt 250k...and with deposit with 6.5% its much better

You said its only 1% in US?
How much US banks charge if you borrow money, mortgage or some kind of loan?

Mr Average · Post by **Mr Average** » April 2nd, 2012, 4:19 am

I've thought about renting too. But like you I have a few issues with it:

1. The gross return would be less than what you can get from bank interest
2. On top of that you have extra expenses like property agent fees, repairs and maintenance, rates, lawn mowing, etc
3. You have to worry about tenants possibly wrecking the place, not paying on time, etc
4. There might be periods where the house is vacant

On the plus side at least you'd always have a "home base". And if you sold and bought a new house down the track you'd be up for $10k+ in stamp duty and legal fees which is a waste.

I dunno, I reckon having some bank interest is good. But buying some nice high-yielding shares is also a decent choice. For example, right now you could buy Westpac shares and get a 7.2% fully franked dividend yield. Gross it up for the franking credit and its effectively a 10.3% return. Buy it right before it goes ex-dividend in May and you get 3 dividends in the space of 13 months, which gives a total gross return of over 15%. That's assuming the share price stays flat of course. If it goes up even 5% a year then you're laughing. Obviously it could also go down, but prices are pretty low at the moment so I don't know if they'd go much lower TBH. Plenty of upside in my opinion.

Banano · Post by **Banano** » April 2nd, 2012, 7:25 pm

http://www.goldbandfinance.co.nz/invest ... rest_rates

Gold Band Finance

Current Interest Rates for Unsecured Deposits

Terms ----------up to $4,999--------- $5,000 & over
2 Years----------------- 8.75%----------9.25%

This sounds too good, its NZ institution and 9.25% is tempting

Can you see anything wrong with this guys?