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Coopenae is a Costa Rican financial cooperative (think credit union) with offices scattered throughout the country. They offer certificate of deposit rates (denominated in either dollars or colones) far above those offered by either Costa Rican or U.S. banks, in small or large denominations, and for shorter or longer periods of time. Just for reference, Banco Davivienda’s current one-year rate in colones is about 8%; Coopenae gave us 12.85% last week on a two-year investment.
If you can handle the Spanish, you can learn more at their website:
Marcia and I had the pleasure of meeting Sr. Asdrubal Zamora C., an executive in Coopenae’s San Ramon office, last week. He guided us through the membership application process (in perfect English) and helped us buy two certificates of deposit.
As we were getting acquainted, Sr. Zamora showed us the documentation that verifies that Coopenae is a very safe and secure financial institution. We came away very impressed.
You can reach Sr. Zamora and make an appointment to meet by e-mail at either
or call him at either
2257-9060 ext. 3721 or
8811-1602.
Officers in other offices can probably take good care of you as well.
Taking advantage of Coopenae’s CD rates will require that you become a member. Just like opening an account at any other Costa Rican financial institution, you’ll have to be a citizen or legal resident, demonstrate the source of your income, provide six months of bank statements, and provide a utility bill. Sr. Zamora can give you the complete list of required documents and also Coopenae’s current CD rates.
I would be careful with those cooperativas. Some went “south” in the past.
I remember when Coopemex was offering 8 % on Dollars (when BNCR paid maybe a 3 % maybe..) and 18 % on Colones, about 8 years ago, and 3 or 4 years ago they were closed. Banco Popular took over but people are still waiting for their money.
http://www.crhoy.com/miles-de-asociados-de-coopemex-deberan-esperar-hasta-2014-por-su-dinero/
So if you consider investing there, ask them for their emergency plan.
When we met Sr.Zamora last week, he showed us the latest Fitch rating, the quarterly audit results (done by a rotating list of international firms including Price Waterhouse, KPGM and DeloitteTouche(sp?)) and the latest review by SUGEF, the Costa Rican financial regulators.
To be sure, nothin’s one hundred percent certain, but this does appear to be pretty close.
[quote=”DavidCMurray”]When we met Sr.Zamora last week, he showed us the latest Fitch rating….
[/quote]HAHA! We should all know by now how useless the ratings agencies are. Recall….that “DAYS” before AIG essentially went BELLY UP their Short-Term Debt Rating of A1+/P1 was the equivalent of a long-term “AAA” rating(I’m just citing 1 example). I guess if it’s only a modest portion of your savings you’re placing in these CD’s you should be fine.
[quote=”DavidCMurray”]When we met Sr.Zamora last week, he showed us the latest Fitch rating, the quarterly audit results (done by a rotating list of international firms including Price Waterhouse, KPGM and DeloitteTouche(sp?)) and the latest review by SUGEF, the Costa Rican financial regulators.
To be sure, nothin’s one hundred percent certain, but this does appear to be pretty close.
[/quote]
Those are some interesting numbers. It would be nice if Sr Zamora had some skin in the game to compensate you should the deal go south.
Your collective skepticism is acknowledged. As with virtually all financial transactions, however, a certain degree of faith is involved. Even if someone buys and takes physical possession of precious metals, it’s unlikely that they have them assayed to be certain that (say) the gold ingots are actually pure gold, as represented. Certainly when you buy a stock, a bond, a Treasury security, or whatever, it’s unlikely that you have it audited in advance.
It would be interesting to know how many of those who have expressed skepticism above have seen the audit reports of the financial institutions they patronize. Likely they, too, take the institutions’ stability for granted.
And, replying to the comment immediately above, how many bankers in the U.S, Canada, Europe, or wherever [u]personally[/u] guarantee the deposits in their institutions? Is that a reasonable expectation?
In the meantime, I shared this for what others might make of it. If you’re not interested, that’s fine with me.
Just you wait until I get my cedula. I am headed straight for this investment opp. After my due diligence, of course. Dave, you are a font of information and much appreciated.
On the surface, it sounds interesting. One must calculate the risk and reward. And, last but not least, Costa Rican and U.S. income taxes. During my 30 years of investing, saving and other financial ventures, I remembered what advice a wealthy friend once gave me. “The secret to accumulating wealth, is not how much you make, rather how much you keep!)
Good point! In Costa Rica, CD rates are quoted after taxes are withheld, so if a CD is quoted at 9.2%, for example, the actual rate paid is 10% before Costa Rica’s 8% tax is withheld. And no tax return filing to Costa Rica is required.
In the case of non-profits like Coopenae and others, the interest paid on CDs is not taxable.
A U.S. attorney who is a savvy investor recently told me that taxes paid to a foreign government are deductible dollar-for-dollar from your obliation to IRS. So there is no liability for double taxation.
BTW, the most recent two-year rate is now 12.35%. S/he who hesitates can still get a good deal.
[quote=”DavidCMurray”]Good point! In Costa Rica, CD rates are quoted after taxes are withheld, so if a CD is quoted at 9.2%, for example, the actual rate paid is 10% before Costa Rica’s 8% tax is withheld. And no tax return filing to Costa Rica is required.
In the case of non-profits like Coopenae and others, the interest paid on CDs is not taxable.
A U.S. attorney who is a savvy investor recently told me that taxes paid to a foreign government are deductible dollar-for-dollar from your obliation to IRS. So there is no liability for double taxation.
BTW, the most recent two-year rate is now 12.35%. S/he who hesitates can still get a good deal.
[/quote]David – On the advice of friends we got involved with Coopenae about 18 months ago. I was concerned that about dollar fluctuation so I split my deposit 50/50 colones & dollars to “hedge my bet”, firuring that is one went up, the other would go down (I’ll probably hear from W-41 on that theory, but oh well).
Because of the stability of the exchange rate I have made 13% and 7%, respectively. The “blind hog theory” at it’s best, no doubt.
So anyway, before all the naysayers come out of the wood works, I suggest they do a bit of research…..
^^^ 44 straight quarters of making a profit!
^^^ one of the top 8 largest financial institutions in CR (including the “government insured banks”!
^^^ One of the top 5 financial institutions in CR for ROI over the past 10 yearsTo offer an olive branch to the naysayers, I suggest one with vodka and a twist!
[quote=”costaricabill”][quote=”DavidCMurray”]Good point! In Costa Rica, CD rates are quoted after taxes are withheld, so if a CD is quoted at 9.2%, for example, the actual rate paid is 10% before Costa Rica’s 8% tax is withheld. And no tax return filing to Costa Rica is required.
In the case of non-profits like Coopenae and others, the interest paid on CDs is not taxable.
A U.S. attorney who is a savvy investor recently told me that taxes paid to a foreign government are deductible dollar-for-dollar from your obliation to IRS. So there is no liability for double taxation.
BTW, the most recent two-year rate is now 12.35%. S/he who hesitates can still get a good deal.
[/quote]David – On the advice of friends we got involved with Coopenae about 18 months ago. I was concerned that about dollar fluctuation so I split my deposit 50/50 colones & dollars to “hedge my bet”, firuring that is one went up, the other would go down (I’ll probably hear from W-41 on that theory, but oh well).
Because of the stability of the exchange rate I have made 13% and 7%, respectively. The “blind hog theory” at it’s best, no doubt.
So anyway, before all the naysayers come out of the wood works, I suggest they do a bit of research…..
^^^ 44 straight quarters of making a profit!
^^^ one of the top 8 largest financial institutions in CR (including the “government insured banks”!
^^^ One of the top 5 financial institutions in CR for ROI over the past 10 yearsTo offer an olive branch to the naysayers, I suggest one with vodka and a twist!
[/quote]I remember years ago when I first started my trips here to costa rica. and many people here gringos/ticos were involved with the brothers.
for many years these guys had a great track record of great interest payments. i could not understand how people could invest in instruments like this but they did
and every month they collected $$$ like clockwork.
for many many years..
so to each his own
me personally I would NOT want my money invested in a foreign country like costa rica. :shock::shock::shock:
it amazes me that people do
and all it takes is a comment suggesting
hey.. I just invested in a cd here.. yada yada..
kind of justifying a purchase.. social acceptance.. that sort of thing.
I mean.. it’s costa rica people 🙂
but the lure of passive interest will always attract people.
If I am going to invest money that I could possibly lose
then it must be in something where I can at least gain new valuable skills in the process if I fail.
then at least I am failing forward so to speak.
instead of looking for these types of investments
learn some new skills.. write a book.. create a info product.. etc
nothing happens until a sale is made 🙂
[quote=”bogino”]What is the difference in rates between say a 6 month or 1 year term versus the 2 year @ 12%+?[/quote]
Here’s what I got the other day . . .
Months Interest
1 —– 4.5%
3 —– 6.5%
6 —– 10.00%
9 —– 10.50%
12 —– 12.00%
18 —– 12.15%Coopenae offers longer terms (locked-in) at somewhat higher rates.
Unlike Banco Davivienda’s policy, Coopenae will permit you to cash in a CD early but with a 3% interest penalty just like most U.S. financial institutions. Given that fact, if you have money to invest, and if you don’t think you’ll need it soon, I think you’re better off going for the longest term and highest rate they offer since the 3% early withdrawal discount would apply to a higher rate and leave you with the highest net.
I would go with the 9 month @ 10.50%
the 18 month is double the time and only a 1.65% difference
I live with the “PRESENT” Money theory and not with a PROMISE of payment after X amount of time
9 months looks better than 18 months, by half the time
AND in 9 months I get 10.50% and redeposit it again for another 9 months @ 10.50%
that is 21.00% in 18 months
NO????
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