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What's the best/easiest way to capitalize on the US$/INR exchange rates? One way is to convert US$ to INR, but getting the money back doesn't seem to be straight forward. Has anyone looked into "Indian Currency" CDs at EverBank?

smariner;424305What's the best/easiest way to capitalize on the US$/INR exchange rates? One way is to convert US$ to INR, but getting the money back doesn't seem to be straight forward. Has anyone looked into "Indian Currency" CDs at EverBank?

Yes, this is a historic opportunity. I am heading to the bank tomorrow, again, to take advantage of $1 = INR 50+ rate :)

Why is moving money back not that straight forward? ( I haven't moved big sums to US, so I don't have good answers).

KirKS;424329
Why is moving money back not that straight forward? ( I haven't moved big sums to US, so I don't have good answers).

The postings that I've read on this forum indicate that moving back big sums isn't straight forward.

The EverBank CDs seem like the easiest option (apart from trading in the ForEx market)
- You fund the CD with US$ (and this is FDIC insured)
- You get back us$ after you close the account
- You get an interest of 2% (for a 3 month CD)
- There's an additional upside/downside due to exchange rate fluctuations

smariner;424343The postings that I've read on this forum indicate that moving back big sums isn't straight forward.

The EverBank CDs seem like the easiest option (apart from trading in the ForEx market)
- You fund the CD with US$ (and this is FDIC insured)
- You get back us$ after you close the account
- You get an interest of 2% (for a 3 month CD)
- There's an additional upside/downside due to exchange rate fluctuations

Thanks.. I agree instead of sending it to India and worrying about all the repatriation, this seems to be the easier option for taking advantage of higher exchange rate..

Is Everbank interest of 2% is the best one out there?

smariner;424343The postings that I've read on this forum indicate that moving back big sums isn't straight forward.

The EverBank CDs seem like the easiest option (apart from trading in the ForEx market)
- You fund the CD with US$ (and this is FDIC insured)
- You get back us$ after you close the account
- You get an interest of 2% (for a 3 month CD)
- There's an additional upside/downside due to exchange rate fluctuations

For me living in India, and taking care of Ind/US taxes, 2% makes no sense at all.
I would rather get 8-9% interest in even the most basic FMP or FD. Everything else remains the same for me.
Repatriation to US, if necessary, is something to worry about later. But it should not make one pick a 2% return when a 9% return is available, even considering some repatriation costs/risks.

Situation may be different for those who only have to worry about 1 country's tax.

smariner;424305What's the best/easiest way to capitalize on the US$/INR exchange rates? One way is to convert US$ to INR, but getting the money back doesn't seem to be straight forward. Has anyone looked into "Indian Currency" CDs at EverBank?

If you put transfer to an NRE account and keep it in there then the transfer back is pretty straight forward (at least with Citibank). You fax them a signed letter and they'll wire the funds to your US account. If you have a Citibank US account the transfer can be done online.

If you want to get the 9% interest rates, then those are for NRO accounts and the repartiation is not straight forward. There is still a way, but, not easy and straight forward.

r2i_in_2yrs;424348Thanks.. I agree instead of sending it to India and worrying about all the repatriation, this seems to be the easier option for taking advantage of higher exchange rate..

Is Everbank interest of 2% is the best one out there?

AFAIK, no other bank ever offers a similar WorldCurrency CD. I just spoke to the rep at EverBank -- some brief notes follow.

Exchange rate is 0.75% below the market price, for deposits under $100k (eg: today's exchange is Rs 52.31, so they would offer Rs 51.92)

Exchange rate is 0.5% below the market price, for deposits over $100k (eg: today's exchange is Rs 52.31, so they would offer Rs 52.05)

The account can be opened online & they can transfer the funds electronically from your bank

They report the (2%) interest on 1099-INT

FDIC insurance covers losses due to the solvency of the bank (and of course, not due to currency fluctations)

Seems like the bank has been around for a while

MadMax;424355If you put transfer to an NRE account and keep it in there then the transfer back is pretty straight forward (at least with Citibank). You fax them a signed letter and they'll wire the funds to your US account. If you have a Citibank US account the transfer can be done online.

Good point! Can anyone compare/contrast NRE accounts with WorldCurrency CDs (from everBank)?

Exchange rate offered by EverBank seem reasonable (about 30-40 paise per us$ is lost during conversion, based on current exchange rates). What's the typical exchange rate with NRE accounts?

FDIC insurance is offered by EverBank (max of $250k per person per account). Do NRE accounts offer any such insurance?

EverBank offers an Interest rate (on a 3 month CD) of 2% ; what's a typical interest rate on NRE accounts?

With EverBank, opening/managing the account can be done complete online (opening an account can be done same day)

Interest on Everbank accounts are taxable. What about interest on NRE accounts?

Seems like SBI's NRE savings account pays 4% interest rate!

I went to the bank in India and spent a couple of hours today talking to regular banking staff as well as investment consultants.

From what I gathered:

The gloomy situation for Rupee (from Indian perspective) may continue. Rupee might go down till 54.5 per $ before bouncing back. Indian Rupee is now officially the worst performing currency in the entire Asia (among credible nations), under an "economist" PM :(

NRE FDs in India are totally useless now. Less than 2% rate on average and you are better off just keeping everything in NRE SB which at least gives 4% without any tax. Break your FDs if you get a chance, including FCNRs.

For every 10% Rupee falls, inflation in India may go up by 40-50 basis points. So braze yourself if you have family in India or you live in India.

This may be a great opportunity to pick Indian equities. The longest stock slide in a very long time due to global situation.

NRO SB rates are 4%, but bank would deduct 30% Indian tax at source. It would be up to you then to file & recover this from government, if Indian taxes are not applicable.

NRO FD rates are 9% for any period above 1 year. Awesome chance for those wanting to ladder FDs. Even if rates go up next year, in India, you can just "upgrade" your FD after an year, without any penalty of breaking the longer term.

Repatriation of money to US (or other contries) is easy. From NRE you just do a wire transfer. From NROs, all you need is a certificate from your CA that you have paid taxes in India last year. Then NRO to NRE transfer, followed by NRE to abroad transfer. Max 2-3 days to get your money back to US if needed.

The best non-equity investment the banks & investment advisors are suggesting is FMPs. 9% or more return now with almost zero Indian tax. Hopefully no PFIC too if FMPs are picked without any equity, focusing only on debt & debentures. I need to learn more about US taxes, which I think may be there as regular interest income on the profit.

Again visiting banks tomorrow. If anyone has any particular question, let me know.

- K