Monday, March 15, 2010

Put your money ... WHERE?

If you have any money, that is.

Save in Australia, spend in America
I decided today to write something practical.

For some time I've wondered why the interest on Australian "term deposits" (called CDs in the U.S.) were around 6% APY and in the U.S. CDs (called Term Deposits in Australia) were only gaining an APY interest rate of round 1.4%. I assumed, wrongly I know know, that I was comparing apples and pears. Corn with quandongs ... whatever.

But no. I checked and rechecked and APY (annual percentage yield) means the same thing in both countries.A

It's just that Australia has higher interest rates.

So if you are a dual Australian American citizen, send your money back to OZ!!!

I'm going to.

Oh, and here's a link about it - Bad CD rates force US investors to buy stocks.

On the other hand, if you can afford to buy property, the U.S. is the place as the interest rates are low. My mortgage is 4.25%.

Why isn't there more in the financial press about this interest rate disparity? Seems to me that if you had enough capital you could make a killing.

"Save in Australia, spend in America" is my new motto. In fact it's my first ever motto.

Dress down summer
Summer seemed just around the corner last week in New York. Cloudless blue skies and the sidewalks (streets) full of people. I have to write "sidewalks (streets)" because in the U.S. "street" means road. Road means road as well, I think because Americans like saying, "when the rubber hits the road".

But after a few days of sunshine, the weather became gloomy and it rained and rained. That annoying light Melbourne-y rain - for four days straight, spanning the weekend. So - no gym, no manicure. Instead I did my 2009 tax, a task I hate. And hence this interest in $$$.

Summer in New York, means women walking around in underwear on dress-down Fridays, never-ending heat with no cool spells, ice-cream vendors, Shakespeare in Central Park, stiffling subways (take the bus) and free concerts at the Seaport Music Festival at the South Street Seaport.

As I said a few posts back, eat your heart out, other people.

The Tea Party, the Coffee Party and the Beer Party
I'll write more on the Tea and Coffee (political) parties in the US later. Meanwhile Australians Abroad has started the Beer Party. It's on Facebook. You can join HERE.

We need a slogan.

Contenders are:

1: We shouldn't have a slogan
2: Your shout
3: Our beer is better than your beer
4: We meet in pubs
5: for the pursuit of happiness
6: all of the above (inc 1:)

Stay tuned.


Terry said...

My vote is for 4.

Chinamonty said...

You mean "your shout" isn't the slogan!

Anonymous said...

>>(CDs in the U.S. were around 6% APY) and in the U.S. CDs (Term Deposits in Australia) were only gaining an APY interest rate of round 1.4%.<<
Kate, do you mean that U.S. CDs were paying 6% or CDs in the U.S. were paying 1.4%? Punctuation?
I think you mean U.S. CDs were paying the lower rate, don't you? If not, tell me where.
Well, when you start playing the Foreign Exchange game, you should be careful. I think on AA about a year ago I suggested the same thing, didn't I? Something about "Save your Aussie dollars etc.....the reat Southland will rise again."
There's an easier way to 'play' the exchange rate game, but if you plan to return to Oz in your 'old age', maybe the Australian 6% CD is a good bet. Australia is a 'resource country' just like Canada and assuming the Chinese and the Indians will continue to need stuff that comes out of the ground, the AUD is a good bet. Just remember that there's a lots of people a lot smarter than you or I who control currency prices.
Good luck with that!

Kate said...

CDs - us 1.4%
Term deposits au 6%

My punctuation was in error. Now fixed. Thanks.

Post a Comment