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Thread: Safe bank account

  1. #1
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    Safe bank account

    Hi everybody,
    De to the situation in Cyprus we decide to over think our way of keeping money in Russia. We have a bank account with Unicredit now. I wanted to sk what do you think about keeping large amount of money in Russia? Do you transfer money back to your country( uk for us)?
    I have read that state covers only 700000 rub per person but not sure is it summary amount in all banks in Russia for one person or its for one bank? Would like to hear your thoughts on this subject please.

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    A mattress??? (j/k)

    Before this issue in Cyprus came about I would never have thought twice about having money in a bank wherever as long as the bank was participating in the national deposit insurance program (such as the FDIC in US).

    Now, with this "bank tax" being discussed in Cyprus - the safest place for your money is in a bank safe deposit box or a personal safe that is permanently installed in your home. Even safer it seems would be to trade fiat currency for gold or silver. At least they will always have some value.

    While one can earn interest in Russia this is not possible in the US or EU as interest rates are at 0% for all intents and purposes. I will no longer be keeping funds in a bank in the West beyond what is needed at the present.

    I NEVER ever thought that I would write what I just wrote ... but the world is on a scary downhill spiral.

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    Quote Originally Posted by Tatiana1888 View Post
    I have read that state covers only 700000 rub per person but not sure is it summary amount in all banks in Russia for one person or its for one bank? Would like to hear your thoughts on this subject please.
    One bank. Each bank is treated separately. The nice thing about Russia is that they also cover deposits in other currencies besides the Ruble. Deposit Insurance Funds in many countries only cover deposits in the national currency.

    So ... don't keep more than the equivalent of 700k rub in any one bank. Of course, this doesn't cover you in the case of legislated theft as is being discussed in Cyprus.


    Here is a link to the law in English...

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    Your money is very safe in Russia. The banks here aren't showing any signs of trouble like the European banks, and the government is well-financed.

    I wouldn't move my money elsewhere.
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    rubyrussia is offline Users Awaiting Email Confirmation
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    Quote Originally Posted by mrzuzzo View Post
    Your money is very safe in Russia. The banks here aren't showing any signs of trouble like the European banks, and the government is well-financed.

    I wouldn't move my money elsewhere.
    Tell that to the Russians who lost everything twenty years ago.

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    Quote Originally Posted by rubyrussia View Post
    Tell that to the Russians who lost everything twenty years ago.
    or in 1998. the last crisis was only in 2009, 4 years ago.

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    Quote Originally Posted by Potty View Post
    or in 1998. the last crisis was only in 2009, 4 years ago.
    I was here in 2009 and didn't lose a cent off my balance. In fact, the interest rate being higher actually earned me more money than anywhere else.
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    Quote Originally Posted by Potty View Post
    or in 1998
    It's absolutely wrong to compare Russia's current economy and fiscal policy to the 90s. Absolutely everything is different.

    Just like it's wrong to compare EU's economy to the 90s.
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    HI

    I transfer my money to the UK (through Sperbank).

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    Quote Originally Posted by mrzuzzo View Post
    I was here in 2009 and didn't lose a cent off my balance. In fact, the interest rate being higher actually earned me more money than anywhere else.
    but you could.
    http://www.zanimaem.ru/spravochnik-z...tvo-bankov.php

    Quote Originally Posted by mrzuzzo View Post
    It's absolutely wrong to compare Russia's current economy and fiscal policy to the 90s. Absolutely everything is different.

    Just like it's wrong to compare EU's economy to the 90s.
    i do not compare. i just say that russia is never safe.

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    Quote Originally Posted by Potty View Post
    I could, if I were stupid enough to keep my money in an obscure private bank with only a few branches yes. It's safe to say that the bigger banks will no go bankrupt.

    i do not compare. i just say that russia is never safe.
    Neither is Europe or US or anywhere else. With the latest economic troubles of the EU, Russia sounds much safer.
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  12. #12
    Lost in moscow is offline Whatever it is -- I didn't do it!
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    I went into BSGV the other month, asked them what is the highest interest rate they can offer me if I wanted to open a savings account. It was something like 5%.
    But inflation is about 12%. I'll end up losing 7% a year.
    "yes I am aware of that, but the 5% is better then keeping it under your pillow"
    logical, 5% is better then 0% but it's still a lose, they know it, and they seem to do it on purpose. After that, I understood that there is no real point to a bank anymore. There are so many other options that offer better interest rates, and given the stability of the banking system, the risk is basically the same either way.

    I have never seen any point in keeping large amounts of liquid cash. Money is after all unstable, to put your faith that it will continue to keep it's value year after year is also risky.
    The Ruble is stable, but it doesn't take much to weaken it.

    Invest into stuff.
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    Quote Originally Posted by Lost in moscow View Post
    I went into BSGV the other month, asked them what is the highest interest rate they can offer me if I wanted to open a savings account. It was something like 5%.
    But inflation is about 12%. I'll end up losing 7% a year.
    I wouldn't open a savings account, but rather a CD. Even in USD you still get better rates than anywhere else.

    You won't get a good interest rate anywhere on a "liquid" account like a savings account.
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    Quote Originally Posted by Lost in moscow View Post
    I went into BSGV the other month, asked them what is the highest interest rate they can offer me if I wanted to open a savings account. It was something like 5%.
    But inflation is about 12%. I'll end up losing 7% a year.
    "yes I am aware of that, but the 5% is better then keeping it under your pillow"
    logical, 5% is better then 0% but it's still a lose, they know it, and they seem to do it on purpose. After that, I understood that there is no real point to a bank anymore. There are so many other options that offer better interest rates, and given the stability of the banking system, the risk is basically the same either way.

    I have never seen any point in keeping large amounts of liquid cash. Money is after all unstable, to put your faith that it will continue to keep it's value year after year is also risky.
    The Ruble is stable, but it doesn't take much to weaken it.

    Invest into stuff.
    Thanks for your opinion .
    I agree that it is no point to keep money as large amount doing nothing . That what I looked at thinking about saving account and rates ( as they are higher in Russia). But I am very worried to get up one day and loose all!
    To invest you really need to know the subject - where to invest?
    Any advice?

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    Quote Originally Posted by mrzuzzo View Post
    I was here in 2009 and didn't lose a cent off my balance. In fact, the interest rate being higher actually earned me more money than anywhere else.
    I don't remember interest rates being that high at all, maybe they hit 10% for one or two quarters. But the problem at the time was that banks didn't have any liquidity, and I also remember hearing of "banking black lists" that were floating around, which different players used to gauge the banks credit-worthiness. There were also numerous smaller banks that went under. You can check this by looking at who defaulted on their bonds. I also remember certain banks actually severely limited the amount of money that people could withdraw. And by that, I mean to 3k rub a day. In addition, if you remember back correctly, the ruble went thru numerous mini-devaluations, which in effect, meant that you lost money.

    At the time, 27 rubles = 1 usd. Then, over a few months, it ended up spiking 38 or so, before settling again at around 35. Since that time, it has traded down to about 30ish.

    So, while you might be correct in saying that you didn't lose 1 ruble, that same ruble doesn't buy you nearly what it did before the crisis. In addition, since most food prices are somehow connected to dollars or euros in some way, prices went up, and never really came back down. I was looking at receipts from that time period, and I used to be able to buy around 10 bags of groceries for about 3k. Now, my average bill is 5k, and I usually only get about 3-4 bags of groceries. I don't buy expensive name brand, processed foods, or "imported" foods either. Just basic raw foodstuffs.

    Looking even further back, I remember in 2002 the bank runs on Alfa bank, which as it turned out, was basically started because of PR hit job carried out via the press. But that didn't stop people from lining up to get their money out.

    In short, although you might get seemingly get higher percentage rates with a ruble deposit, it doesn't take much volatility in the FX markets to completely wipe out whatever gains you did get. In addition, you also are fighting against inflation. So, be sure to get a return that will cover both of those factors.
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