Korean Job Discussion Forums

xCustomx · Joined: 06 Jan 2006

Nonghyup bank told my girlfriend that a new law was passed this year which makes it illegal for foreigners to invest money in a CD. Nonghyup offered her a rate of only 3.75%, and thats for depositing 40 million won. For a 6 month contract, I'd only get around 800,000 won. Seems like a pretty bad ROI. I told her that Tomato bank offers a rate of 4.2%, but she said that it's better to go with one of the larger banks like Nonghyup, Shinan, or KB.

Does anyone know how I can get a better rate? And what's with it being illegal for foreigners to invest their own money? As much as I trust my girlfriend, I'm not about to send all my money into her account so she can invest it.

Otherside · Joined: 06 Sep 2007

I know alot of banks offer MMF (Money market funds). Basically it is an interest bearing fund with far more flexibility than a CD. I opened one in January at IBK. (They may not have had the best rate, but I bank with them, so the convienience was worth the time and effort in shopping around and dealing with another bank to earn a few pips).

The interest rate fluctuates based on the prime interest rate (Government lending rate, not sure of the "American" word for this). Currently, I believe it is 3.77% (which is VERY similar to the rate offered to your GF). On the plus side, you can withdraw your money at a moments notice. (With my MMF, I have to go into the branch to do any transactions on the MMF, no online/atm transactions for me Sad

, and any withdraws will show up the following day). Finally, you can add money as and when you please, so it is a good savings tool.

For the majority of teachers I think an MMF is far better than a CD, as we can't be certain we'll be here in a year's time, and thus would not want our money locked up. However, it's gonna cost you around 0.5-0.6% annum. (which on a W10mill deposit is 50-60K over a year).

call_the_shots · Joined: 10 Oct 2008

Ya-ta Boy · Joined: 16 Jan 2003 Location: Established in 1994

Nong Hyup also has mutual fund programs available. I don't know if you're interested in that...

Otherside · Joined: 06 Sep 2007

poet13 · Posted: Mon Mar 23, 2009 4:52 pm Post subject:

I have Time Deposits, a Money Market account, as well as a compound interest account. I asked about opening another TD account recently and they said nothing about new laws. The rate of the TD does fluctuate with the street rate. I got more than 6% with mine, but that was in september. Now, I'd be lucky to get half that.

Otherside · Joined: 06 Sep 2007

poet13 · Posted: Mon Mar 23, 2009 5:46 pm Post subject:

Yes, that's correct. It can be both good and bad. I was lucky because I locked in a high (relatively) rate last fall. The rate now sucks. I have a compound interest account also with a fixed interest rate. I can put money in there until the (I think) 8th month of the year long period and earn that interest rate. I can put a maximum on 10,000,000 Won per month in there. That rate isn't as high as the TD, but it's much higher than the money market account. I think I get about 5.5% on the compound interest, about 6.4% on the TD, and something quite low for the money market.

Tux · Posted: Mon Mar 23, 2009 5:53 pm Post subject:

My wife thought of a really good idea the other day. If you don't have your own place already and have 40-50million sitting around then approach a real estate agent to see if you can use that money as a deposit on a rental place. Usually if you can deposit that much, then the landlord wont charge you rent each month. You can then grab the housing allowance from you school (400-500k) per month and make a double digit return each year. I guarantee you wont get that sort of return from any bank.

Thats a return of 5 million per annum on an investment of about 50 million. Downside I guess is that you are less mobile and you will have to buy your own furniture. So i guess subtract 2 mil in your first year for furniture/appliances etc.

xCustomx · Joined: 06 Jan 2006

Thanks everyone.

I already offered my landlord an extra 10million won last year if he would agree to reduce the rent, but he said that the rent money I pay is one of the few sources of income he has, so he didn't want the extra key money.

diver · Joined: 16 Jun 2003

xCustomx · Joined: 06 Jan 2006

My co-teacher recommended opening a CMA account, but does anyone know what kind of rate I can get with an account of that type?

CA-NA-DA-ABC · Joined: 20 Jun 2006

Ya-ta Boy · Joined: 16 Jan 2003 Location: Established in 1994