Hi all,
I have a very simple question, but I am originally from Bangladesh.
In my home country, most bank provide with a 8.5% annual return on a fixed deposit (this is calculated after tax and bank fees are paid).
After testing is for around 2 years and seeing the returns, I am thinking sell most of my stocks and just transfer the funds to the 3 banks I have back home.
Do you guys think it's a good choice or SP500 is still the better option?
8.5% AER from bank or SP500?
byu/C0untingNightmares inpersonalfinance
Posted by C0untingNightmares
4 Comments
The S&P returns are before you account for FX change. When you do the SIM, do you account for that too? How much did local currency lost to dollar, euro and yen recently?
The Taka also devalues significantly against reserve currencies over time. Calculate the return after FX loss, then compare.
In 5 years the Bengladeshi Taka lost roughly 33% of its value compared to the USD.
Yes you will have more Taka thanks to the higher AER but if you do the calculation, the Taka you’ll have in the end will not outperform even the most basic savings account in the US.
8.5% is tempting, but S&P 500 is usually better long term for growth.