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Large sum of money through immigration

If you are not resident what options have you?

It's a very good return. When you consider many people base their retirement income on a return that is modest, for good reason, perhaps 3/4% would be my budgeting figure and a rainy day buffer for X years in downturns, a 12% return would mean X3/4 the earning power from this type of investment and could knock years possibly decades when considering a retirement timeline.

Is there much info online when this topic can be found and discussed from expats who have been through it?

Thanks for the info guys......

"If you are not resident what options have you?"

With community banks you don't have any options if you're not a resident or married to an Indonesian citizen.

But, as Hansson wrote about above, there are commercial banks here which offer good interest on savings accounts.  However, for any banking here in Indonesia you will need a KITAS (residency visa).

b4bmm :

If you are not resident what options have you? ....

No legal ones.
Some seem to have managed to open accounts illegally, but that's a really bad idea that could get you into serious trouble.
I very strongly suggest not trying it.

enduringword :

Hansson,
I will pm you on the Fixed Deposit and interest rate.

I would appreciate info regarding this also if you have some?

Hsbc 7.75% (negotiable) is a good rate. The highest rate I can see is 5.5% for Rupiah? Maybe the rate has come down since the post was made in april?

https://www.hsbc.co.id/1/2/miscellaneou … rest-rates

Mandiri is 6% it seems. 3 month term seems to offer highest rates, I guess a signal of how volatile things are that they prefer shorter lock in periods.

http://www.bankmandiri.co.id/english/re … 122011.asp


Standard chartered and BNI seem to offer better rates than both above at 6.5% for 12 months locked in above 1B rupiah.

https://www.sc.com/id/en/save/fixed-deposit.html

http://indonesia.deposits.org/accounts/ … posit.html



Is there a government depositors guarantee for these big banks? Im sure the local banks won't offer this guarantee. Are things flexible with these bigger banks and if so by much?

b4bmm :

I would appreciate info regarding this also if you have some?

It would be handy to know what immigration status you hold/will hold.
If it's any of the long term visas this is useful information, but it's all pointless if not.

When I last checked, back in April, HSBC offered their best rate for over a miliar but for a one year term which wasn't interesting to me. Yes it was a lot more than 5.5%. At the same time, other banks were offering reasonable rates for short term deposits which was more interesting for my own purposes.

Overall, not just in Indonesia but in Malaysia and the UK, I've always found that HSBC rates are never that good. The advantage of using HSBC is only for global transfers.

One of the banks that I was seriously interested in placing funds was Permata Bank. However, I am not sure of their current rates but perhaps you could check them out.

In my opinion, you may stand to gain or lose a lot more money on the exchange rate when you transfer/convert your foreign currency to Rupiah than the small differences that you might make on Fixed Term interest rates.

Another thing to consider is whether your Indonesian bank places any monthly limit on the amount of foreign currency funds you can send overseas.

I also think that having short term deposit accounts allows you the versatility to play the currency market which can be very lucrative.

Just my two cents....

Do I need to have a visa to discuss this issue and learn more about it?

I'm aware of the visa requirements.

b4bmm :

Do I need to have a visa to discuss this issue and learn more about it?

No, but the point is moot if you aren't in a position to legally open an account.

Thanks Hansson

The exchange costs are definitely something that needs to be factored in.

If you deposited let's say 100,000 at 6.5%.
100,000 that you needed to transfer from $ to Rupiah. You would get 6500 yearly interest return.

In my experience of travelling throughout Asia the best rates you can get are in money exchangers if you are willing to shop around, with Indonesia and Philippines being the places where I can get closest to the online rate. Usually very close, You may lose 1% or less and can negotiate depending on the amount. Getting that cash in could be a nuisance/safety issue depending on how motivated you are and how good your planning is but thats another matter.

Regarding Fred's comment on visa issues, I'm aware of some of those issues although not extensively but I'm also aware that people use nominees to buy property in Indonesia, what would the difference in this situation be? It's not something I have looked into just something that came to mind from Freds post?

Is there any withholding taxes by the banks with this interest earned?

From what I am aware Indonesia is on the same path as every other country worldwide in dropping interest rates and I presume this is the main reason the HSBC rate you quoted a few months back has changed to what it is today, to spur economic growth. That's almost 2% though which is huge in the space of 3/4 months.

Does anybody have any opinions on the outlook of this bank rate going forward, is it likely to keep dropping and how will this affect many retirees that are living their depending on it for an income?

Edit for Fred: I don't consider it moot as I like to know these things to help others with advice if ever I have the opportunity and of course help myself. You don't know my personal situation or what/if any connections I have to Indonesia and it's a subject of great interest to me. I feel this should have its own thread, not sure if mods can break the thread from when I posted requesting more info, into a new thread or not, for the benefit of all posters on the forum. I'm guessing that lightbulb thing means your one?

Last Edit: just found this really good comparison chart/link for all of what seems main banks throughout Indonesia. 7.25% is the top rate which has been updated as from yesterday. Quite a good rate from Bank Negara Indonesia, anyone familiar with this bank? There are many good international banks on here that offer good rates.

http://pusatdata.kontan.co.id/bungadeposito/

The forum is open to everyone irrespective of the visa they hold or plan to hold. Information is free to share and discuss here. Forward planning is a good thing.

If you are going to exchange currency at money changers then I agree you'll get the best rates, but you can only carry so much cash at a time and it's dangerous carrying so much around. If you plan to T/T the money here from overseas, either in Rupiah or the foreign currency where you are from, then that's when you must really check around for the best exchange rates because with large amounts you could easily gain or lose a small fortune.

Interest rates are dropping everywhere. In Malaysia my RM's at HSBC and Ambank have both warned me that the recent drops will continue further this year. I assume the same will happen in Indonesia, but at least in Indonesia you can get double the interest rate on FD's than you can in Malaysia. However, as you seem to have pointed out, relying on interest rates for income may not be enough.

But your suggestion about buying property in Indonesia is good, although I buy in my wife's name rather than through a nominee. That is the only way I would buy in Indonesia.

I am buying in Bandung and Bali. The property market is still a good investment in Indonesia. Property prices in Bandung will increase once the new medium speed rail system is completed between Jakarta and Bandung. We spend a lot of time searching for old houses in a good location with a Hak Milik. In Bandung you can find such properties from Rp1 - 1.5 Miliar but you may need to rebuild. Cost of building a house is Rp2 million/m2 for lower quality to Rp3 million/m2 for decent quality. The potential for making profit is good. House flippers who rebuild old houses can make Rp500 million to Rp1 miliar on average. So if you have the means to be able to do something like that, the money earned is much better than what you can earn on Term Deposits. However, no idea on the legality of doing that through a nominee.

Regarding Fred's comment on visa issues, I'm aware of some of those issues although not extensively but I'm also aware that people use nominees to buy property in Indonesia, what would the difference in this situation be?

Not much.
Both are dodgy at best, and both can see you lose all your money.
Nominee housing is very close to illegal or plain illegal whilst a nominee bank is very very illegal and likely to get you arrested.

Hansson :

The forum is open to everyone irrespective of the visa they hold or plan to hold. Information is free to share and discuss here. Forward planning is a good thing.

Not quite.
Illegal activity is not acceptable here so the visa issue is valid.
Dodgy land ownership is one thing but suggestions of dodgy bank accounts is seriously bad.

"Regarding Fred's comment on visa issues, I'm aware of some of those issues although not extensively but I'm also aware that people use nominees to buy property in Indonesia, what would the difference in this situation be? It's not something I have looked into just something that came to mind from Freds post? "

My first point is that this old scheme of using nominees to "buy" property in Indonesia is no longer legal.

If you are contemplating using a local nominee here in Bali to deposit funds into a Community Bank (or any other bank) on your behalf I would strongly suggest that you re-consider.

While interest earned on Community Bank deposits are tax free for the locals using said bank, if you as a foreigner were earning such interest under this guise, that would almost certainly end up causing your local nominee, and yourself, a whole lot of problems for non compliance of tax laws.

Worse though are the laws in place regarding money laundering.  Indonesia is not a tax haven, so overt attempts to hide money here usually end up with forfeiture. 

"The good old days" are over.  These days, it's about playing by the rules...even for expats that have been here a lifetime.

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