Taking Advantage of High Yield From Latin America’s Strongest Banks

[20MillionDinar]

Taking Advantage of High Yield From Latin America’s Strongest Banks

By Jeff D. Opdyke, Editor, The Sovereign Individual

Dear Sovereign Investor,

In December, I told my paid Sovereign Individualsubscribers that 2012 would be the Year of Yield. With U.S. interest rates nearly non-existent, income seekers have to become more creative...and more resourceful.

I routinely look at a variety of investments that, I believe, are relatively safe ways to collect income. Most of the time that means foreign companies delivering yields of between 5% to 10% in currencies that offer an attractive edge for investors looking to hedge against historic U.S. dollar weakness.

However, during my latest trip to Uruguay, I found a yield play that was unexpected – and safer than stocks. It’s great news for investors, savers and

A Big Benefit for Investors and Savers

Banks in this well-run country offer simple, interest-bearing accounts that pay up to 4.5% annually. CDs offer more. Uruguayan residency is not required to bank here, and opening an account is easy – though you do have travel to Uruguay… but that’s far from a hardship, given how appealing this country is.

One of the banks I recommend is state-owned Banco de la Republica, Uruguay’s largest bank. Accounts at Banco de la Republica can be denominated in dollars, euros or pesos. The dollar and euro accounts carry tiny interest rates, however. To lock in the big returns requires a local peso account.

In pesos, you can pick up a CD yielding between 5% and 6% annually – multiples larger than you will find anywhere in the U.S. The minimum investment for a one-year CD is just US$1,000, or 5,000 Uruguayan pesos.

Along with hefty interest rates, stashing cash in a Uruguayan CD comes with another significant benefit – currency exposure. The local peso is a stronger currency than the dollar because Uruguay’s finances and resource-based economy are fundamentally better off than America’s.

Over the past five years, the Uruguayan peso has gained 23% against the U.S. dollar. Had you invested in a hypothetical, 6% annual time-deposit five years ago, your real rate return would be just shy of 10.5% a year after accounting for the currency move.

This Latin Nation is Not as “Exotic” as

You Might Think…

If you are a regular reader of Sovereign Investor, you know I am big fan of Uruguay. I’ve written to you about a variety of opportunities that can be found in this magnificent little South American nation – including: easy to obtain residency, access to dual citizenship, a high quality of life, and vast tracts of productive cattle or farmland. And I’ve shared video interviews from the financial tour I hosted there a little over six weeks ago.

In fact, just two weeks ago, I sent a note to Sovereign Individual subscribers asking how many would be interested in join me on another investment trip to Uruguay. Within hours, over 100 paid subs emailed me to say “Count me in, Jeff”. (We’re specking out another trip right now.)

Here’s why this country is staring to get the attention it rightfully deserves…

Uruguay is strongly middle-class, unlike much of Central and South America. Democracy and the rule-of-law are well-entrenched here. Government is stable and transparent.

Uruguay’s banks are healthy, and all easily survived the global financial crisis. They’re highly regulated, highly profitable and highly liquid. They’re among Latin America’s strongest banks. These are the banks into which wealthy Brazilians and Argentinians deposit their money in good times and bad because they know the government won’t default and the Uruguayan central bank won’t devalue the currency.

It’s the safest country south of the border and the wealth gap is narrow, meaning there’s no social unrest or crime fueled by angry have-nots. You don’t find beggars roaming the streets, or bare-foot and impoverished children panhandling. The literacy rate in Uruguay matches the U.S.

There’s no need to pay bribes. There’s no mañana attitude. The country is clean and tidy. The beaches are beautiful, many wild and often empty. The national highways are first-world and well-maintained.

All of those are the very reasons I would move my family here with no qualms if my son wasn’t so attached to his high school.

I believe that investors who make the best decisions for their money are those who go beyond the beaten path to find where the true opportunities exist. You might never think to consider banking in Uruguay. Yet, it is a solid opportunity to grow your wealth with a safe, high-yielding time-deposit.

Until next time, stay sovereign...

Jeff D. Opdyke

Edited April 14, 2012 by 20MillionDinar

[umbertino]

Interesting ... Thanks... It's infact one of the Countries I want to go check.

[Usaok]

Thk u , I am going to google that country now . I have traveled fluently but never thougt of going there .

[20MillionDinar]

Interesting ... Thanks... It's infact one of the Countries I want to go check.

You're welcome. I am also seriously considering taking a trip to Uruguay! I've been trying to convince my lady to move out to central / south america but she's not going for it, well, not yet anyways.

I have a good friend who moved to Ecuador about 2 years ago, he really enjoys it out there. Totally different culture and way of living.

[okane]

Thanks for sharing 20mil! Good article