15% term Deposits CBA Japan

P

Property Meister

One of my friends has sent me a link. Although I can't read it (except for the numbers)

it basically says 3 month term deposits 15%, must be deposited in Yen

its a link from CBA Japan, I wasnt even aware that CBA were in japan.

15% seems too good to be true!
 
Taking away the issue of exchange rate risk and related costs, your after tax return is 9% (assuming 40% marginal tax rate).

Paying off your mortgage (assuming 7% IR & same marginal tax rate) is a tax adjusted 11.7% return.

I'd keep my money here
 
15% in yen is even better than 15% in AUD.

Forget borrowing yen to deposit AUD. You could borrow yen and deposit yen and make a guaranteed killing!

Impossible I'd say, unless it is not a deposit but some bond in a small or otherwise weak company.
 
Vietnam have similair rates for term deposits, which must be in VND.
http://www.ocb.com.vn/deposit-interest-rate-in-vnd.html

Most of the other banks there offer the same rates for VND accounts.

But...given the inflation over there they need to be that high for the locals to get any benefit and given the aus dollar is up nearly 50% againt the VND over the last 12 months it wouldn't be that wise to have your money sitting in VND, or in JPY for that matter..
 
G_Man said:
But...given the inflation over there they need to be that high for the locals to get any benefit and given the aus dollar is up nearly 50% againt the VND over the last 12 months it wouldn't be that wise to have your money sitting in VND, or in JPY for that matter..
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I wouldn't do anything in Vietnam with cash. We were there for two weeks a few years ago and there was a noticable difference in the exchange rate during that period due to inflation.
 
I don't understand what they mean Australian dollars from yen.

I think it means you must deposit yen but into an Aud account.

Couldn't I go and take out $1,000,000 AUD loan convert it to Yen, get my 15% on my AUD deposit and take that in stead of 6.51% in U bank in AUD

The deposit appears to be in AUD anyway you just have to deposit yen to get the special rate.

There is no currency risk if you are an Australian and are happy with AUD deposits. Indeed you could borrow a million off combank in Aud convert it to yen and then deposit for three months and make exactly $20,000.00 over the three month term >> 7% v 15% over three months ; 2% per quarter margin.

Both are in AUD so there is no currency risk apart from the time taken to take your yen and deposit them back as AUD.

Can someone tell me why this will not work?

Interesting that a deposit from AUD is paying 5.2%. What is the difference. The bank can change either for the other at a whim surely? Is there a liquidity crisis in the AUD that no one is talking about?
 
tom32 said:
I don't understand what they mean Australian dollars from yen.

I think it means you must deposit yen but into an Aud account.

Couldn't I go and take out $1,000,000 AUD loan convert it to Yen, get my 15% on my AUD deposit and take that in stead of 6.51% in U bank in AUD

The deposit appears to be in AUD anyway you just have to deposit yen to get the special rate.

There is no currency risk if you are an Australian and are happy with AUD deposits. Indeed you could borrow a million off combank in Aud convert it to yen and then deposit for three months and make exactly $20,000.00 over the three month term >> 7% v 15% over three months ; 2% per quarter margin.

Both are in AUD so there is no currency risk apart from the time taken to take your yen and deposit them back as AUD.

Can someone tell me why this will not work?

Interesting that a deposit from AUD is paying 5.2%. What is the difference. The bank can change either for the other at a whim surely? Is there a liquidity crisis in the AUD that no one is talking about?
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my interpretation is for the 15% one, you've got to have a japanese bank account, put the yen into deposit for 3 months at 15%.

so if AUS people were doing it, we would have to get AUD, send it to japan, convert it, deposit it at 15%, withdraw and convert back from JPY to AUD

hence the currency risk, you may make your 15%pa=3.75% gain for 3 months, however if the currency has moved against you by 3.75%or more, you lose
 
you're going to have to see what it takes to open a japanese bank acc.

It's not as a easy as it seems.

In singapore - u need a minimum SGD20K, china (need connections - if you're not a resident - you can't have one so easily), malaysia (again connections)

So yeah why not try ur luck.
 
Property Meister said:
my interpretation is for the 15% one, you've got to have a japanese bank account, put the yen into deposit for 3 months at 15%.

so if AUS people were doing it, we would have to get AUD, send it to japan, convert it, deposit it at 15%, withdraw and convert back from JPY to AUD

hence the currency risk, you may make your 15%pa=3.75% gain for 3 months, however if the currency has moved against you by 3.75%or more, you lose
Click to expand...

My readin of it is slightly different.

You would have to convert to Yen then deposit into an account with Commbank in Japan but the account is denoted in AUD. Hence the only time you have currency risk is when you initially move to yen before it is moved back to AUD.

As I said though it is not 100% clear to me. Well not so much 100% clear more too good to be true?

Melbournian has a good point how does one set up an account with commbank of japan. I guess I could ask combank here and see where that gets me?

Say I am going to move to Japan or some other story as to why I would need it.
 
tom32 said:
My readin of it is slightly different.

You would have to convert to Yen then deposit into an account with Commbank in Japan but the account is denoted in AUD. Hence the only time you have currency risk is when you initially move to yen before it is moved back to AUD.

As I said though it is not 100% clear to me. Well not so much 100% clear more too good to be true?

Melbournian has a good point how does one set up an account with commbank of japan. I guess I could ask combank here and see where that gets me?

Say I am going to move to Japan or some other story as to why I would need it.
Click to expand...

Perhaps just ring commbank here is Aus and tell them you have seen their webpage showing rates, and ask for details as to how to proceed with opening the account. Be interesting to hear what they have to say.

Imagine the compounding if you were happy to leave it for a while.
 
VYBerlinaV8 said:
Perhaps just ring commbank here is Aus and tell them you have seen their webpage showing rates, and ask for details as to how to proceed with opening the account. Be interesting to hear what they have to say.

Imagine the compounding if you were happy to leave it for a while.
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I will wonder in at lunch time. They will be getting sick of me down there. Last week hitting them up for a loan this week asking for exotic bank accounts.

If it goes beyond the 3 months it is even better.

At 4% inflation if you can get 15% return on capital even parking up 100k now and forgetting about it you get 1.2million back in todays dollars in 25 years.

And I thought I had to buy greek sovereign bonds to get that kind of return, and that isn't even in AUD.
 
tom32 said:
You would have to convert to Yen then deposit into an account with Commbank in Japan but the account is denoted in AUD. Hence the only time you have currency risk is when you initially move to yen before it is moved back to AUD.

As I said though it is not 100% clear to me. Well not so much 100% clear more too good to be true?
Click to expand...

hmm..interesting, maybe you are right, damn confusing though
isnt it essentially the same thing as what I mentioned????

as in, open a CBA JP bank account, convert say $100 AUD into 8720.74yen (1.00 AUD=87.2074 JPY as of 30/05)
wait 3months, 8720 yen becomes 9074Yen
convert it back to aud, so if the AUD VSJPY rate has gone higher=you lose, lower=you win more!

ive got some expat friends there so I might see if they know, I wouldnt be surprised if CBA at a local branch had no idea.

tom32 said:
If it goes beyond the 3 months it is even better.

At 4% inflation if you can get 15% return on capital even parking up 100k now and forgetting about it you get 1.2million back in todays dollars in 25 years.
Click to expand...


unlikely to extend, it does say 3.02% after 3 months, yeah 15% would be awesome, noone would be buying houses
 
As VY suggests I am going to check it out at lunch time.

They are going to be getting sick of me at the local combank branch. Got everything from loans approved to inactive foreign exchange accounts.

Anyway I know they cannot sell it from here in Australia but I wonder if they can tell me how to set up an account in Japan.

The minimum amount will not be an issue as it is only worth doing with a bit of coin anyway. The risk I guess is if it turns out it is actually bonds in certain Japanese power companies. they really cannot call it a deposit if that is the case unless Japan has different rules around honesty in advertising.
 
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