Jump to content
Star

Interest Rates, Inflation, and Investments in Turkey

Rate this topic

Recommended Posts

Yapı Kredi sounds pretty good, but they didn't have a branch in our town when we first came here so we went with Ziraat, who now give us 12% (I think you can sometimes negotiate a higher rate).  We later opened an account at Vakıf, its interest rate (currently 14.5%) is consistently higher than Ziraat's & it's recently become a full govt bank.  We closed our account at Halkbank 4 years ago after that Süleyman scandal but recently opened another account there, now paying 14%.   Don't know how long these rates can last against the current inflation rate.... it feels like something's going to crack somewhere soon......  

Share this post


Link to post
Share on other sites

Thanks

What do u mean by last sentence?

Are these rates applied to any amount of money?  Also, can somebody withdraw whenever he wants without fair (ceza)? It is somewhat different in my country. For instance, it is yearly 20 percent and they give profit every month. However, If you withdraw before the end of the contract you should pay fair. It is not reasonable to do so.

Is it same in Turkey?

 One more question. I have 4000 dollars and my university pays me 2200 every month which Is likely to be pay-off the expenditures since I am married. I hope they increase it.

So, do you think it is reasonable to change that to lir and put it in vakif or yapi kredi or ...?

Or just change some of that money to lir in the rate which seems highest ?

Share this post


Link to post
Share on other sites

Hi Star,  the accounts we have at each of those banks are 35-day term (or time) deposits, the rates are annual but paid at the end of each 35-day period (actually you can choose how many days you want to keep the money in, but if it's under 32 days you will get a lower rate).  Of course 15% tax is taken from the interest every time.  If you withdraw money before the rollover date you will lose all the interest for that period, so it's best to wait until the 35 days is finished then withdraw without penalty.  The rates may not apply to any amount of money, the banks have charts which show how much they pay for whatever amount.  Examples:

 https://www.ziraatbank.com.tr/tr/UrunHizmetUcretleri/FiyatVeOranlar/Pages/FaizOranlari.aspx

http://www.halkbank.com.tr/channels/1.asp?id=1477

The rates shown are standard but you can negotiate a higher rate !  If I had $4000 I wouldn't change it all to lira -- inflation is high at present and you may lose. Best to get advice from Ken for this ! :D 

As for the last sentence, I was only wondering, in light of the current economic situation, how long they could sustain these high rates before something breaks down somewhere......  :) 

Share this post


Link to post
Share on other sites

Thanks Meral,

All of these rates are for year, right? I mean the interest rate. Also, is halkbank governmental? It gives interest for USD too but it is really low.

In iran the banks give 20 percent yearly! They survive by printing money! It seems that Turkey will also be in trouble in future!

So, you mean I put dollars in bank without interest, right? Or keep it myself and change sometimes to lir?

As you know which bank I put dollar I should withdraw there and if I want to have some from another branch I should pay fair!

Kenneth what is your idea?>!

Share this post


Link to post
Share on other sites

Yes of course you can go to any of the tax offices in Turkey.  I find it hard to believe that they gave you a bank account without a tax number at Ziraat Bankasi though?!  Never ever heard of that before and I have been in Turkey for 13 years now...and Yes, Yes, Yes, in my opinion Yapi Kredi bank is the very best one in Turkey ...The best interest rates that are quoted are all for TL monthly deposit accounts ... so you cannot put US Dollars in there or UK Pounds either ...currently 12.5% at Yapi Kredi and that is based on a year, investing your money every month ... that can be done automatically if you are happy to leave it there for a year, or you can email your contact at Yapi Kredi and advise them every month what you wish to deposit or to take out of that account ... or, do what I do ... email the contact and ask her to transfer some TL to Cash Account and re-deposit the rest into the TL monthly deposit account...  x Angela in Side x

Share this post


Link to post
Share on other sites

I never went to tax office. Maybe since I was a student and I get my rp card they automatically assigned me a tax number! I am sure that I did not go to any vergi dairesi. I just went for my mother. She wanted to open an account. I hope yapi kredi and vakif open an account for Iranian students. If not, I should continue with Ziraat.

Share this post


Link to post
Share on other sites

Yes, they will welcome you at Yapi Kredi bank - no problem being a student - and no problem being from Iran.  Let us know how you get on ... Angela in Side x

Share this post


Link to post
Share on other sites

Thanks all,

Meral, Angela, Kenneth and ...

Just, Ken if you have time I want to know your idea about changing dollar to lir I had talked above

Thanks

Share this post


Link to post
Share on other sites

I assume you're talking about changing all of your money over to Lira. If you have a bank card you can pull money out of the bank machine when you need it, which is what I have done for years. Ziraat Bank and İşbank don't seem to charge any fees, at least in my case. But my bank back home does.

You should change some of it into Lira before you leave, so you will have enough to travel with. You'll get better exchange rates in Turkey, so you can change the rest after you get here, or just take it out of a bank machine. I don't know what your personal bank charges would be, for bank machine withdrawals, you would have to check with your bank.

I am going to be changing my old habit of using bank machines to live on, though. So I am going to make monthly transfers so I can have my utility bills paid automatically by the Turkish bank, and also use a Turkish bank card. There's a fee for the international transfer as well, again you will need to check with your bank on what that would be if you want to use that option. According to my bank, I can transfer it from my US dollar account in the USA to a Turkish Lira account in Turkey, and the conversion will be made automatically at the daily rate.

If you're going to be living here, I wouldn't worry too much about what the exchange rate is, unless you'll be changing the money back into US dollars.

Share this post


Link to post
Share on other sites
2 hours ago, Ken Grubb said:

If you're going to be living here, I wouldn't worry too much about what the exchange rate is, unless you'll be changing the money back into US dollars.

Actually, my concern is stated below.

I change some of my pocket to lir in my country. No problem yet. I and my wife have a few thousands dollars and have a few thousands lir (for the first expenditures such as rent, rp card, transportation and etc.)

I will be given 2200 lir monthly, which might be spent completely since I think the istanbul costs somewhat more than other cities. I think this money is enough for two students. I hope my wife gets fund from her university too. Maybe after 5 months.

No problem yet! However, I cannot decide whether I change my dollars to lir and put it in interest rate bank and don't touch that since I will have a regular income or just put dollars in bank without any interest (since the interest rate for dollar is really low). Maybe a competent economical person could help me! (I talked in a way that I have a million dollars!):D so sorry about sharing this concern with you guys!

2 hours ago, Ken Grubb said:

I assume you're talking about changing all of your money over to Lira. If you have a bank card you can pull money out of the bank machine when you need it, which is what I have done for years. Ziraat Bank and İşbank don't seem to charge any fees, at least in my case. But my bank back home does.

OK. Let me explain. If I open dollar account I will not have an access to the money with credit/debit card. I am sure about that. They did not give me any card 2 years ago and it is still the same. The only way is that Igo inside the bank to withdraw some of it without fair. The fair (ceza) will be applied when I withdraw money from a branch which is different from the branch I opened a dollar account.

This is just an explanation for the people who wants to open account and they do not have citizenship. (Maybe it would be different for Americans or Europeans!)

Share this post


Link to post
Share on other sites
Quote

If I open dollar account I will not have an access to the money with credit/debit card.

True. Unless you keep the money in a checking account in your own country and withdraw it from a bank machine with a bank card for that account.

The interest rate on the US dollar in Turkey is lower because the inflation rate in the USA is lower. It is higher for Turkish Lira accounts because the inflation rate in Turkey is higher. Interest rates in a large part are based on inflation rates.

Also, there is no telling what might happen with currency exchange rates. So if you are going to be using the money to buy things in Turkey, then you should change it to Turkish Lira and keep it in a Turkish Lira account. In that case if exchange rates change it won't matter, because you will have Turkish Lira and be spending it in Turkey. You can put it in a time deposit if you want to get higher interest, but the money has to stay in the time deposit account for the time specified. If you take it out early there is a penalty. If you just have it in a regular account with a bank card, you can withdraw it from a bank machine anywhere with no penalty using your bank card.

Share this post


Link to post
Share on other sites
25 minutes ago, Ken Grubb said:

You can put it in a time deposit if you want to get higher interest, but the money has to stay in the time deposit account for the time specified.

Ohhh this topic has gone well! I learned a lot and I hope many people in future use it.

I remember that ziraat told me the interest rate is 8 percent which will be given to you monthly (8 percent yearly they meant). After 2 months I had to withdraw the money. I had thought that they would penalize me since I should put yearly (But I was wrong). They not only did not penalize me, but also gave a profit till the date I wanted to withdraw.

This time I want to put money on yapi kredi or vakif. I should ask exactly the time-period I should put my money and after that no penalize will be applied.

Share this post


Link to post
Share on other sites

I remember when it was 1.5 or 1.6.

You previously asked about Forex.

Over time, company stocks, especially those held by mutual funds into which you can directly invest, perform above all other investment options, including bonds and cash instruments.  If you want to put your money into such a place for a long time, and let it grow, that is investment. As I understand it, stock mutual funds tend to yield some 15%. But they fluctuate a lot. That is why, when you get close to the time when you will need the money, you should gradually transition your money into bonds, or a bond mutual fund. Lower, fluctuation, and lower interest, but the return is more sure. Then when you need the money, you should transition more into short-term "commercial paper" which is very short-term debt instruments. All of this can be done with mutual funds.

T Rowe Price even offers "Target Date" mutual funds which will create a retirement plan for you based on what date you want to retire.

What I said above is investment. That is, putting money into an investment, so your money will grow.

Forex trading is not investment. Forex trading is gambling. There is certainly nothing wrong with Forex trading. Theoretically, you could start trading right now with 1,000 USD, and tomorrow have 1,500 USD. Or 500 USD.  If you have money to burn and want to give Forex trading a try, by all means do so. But if you are interested in putting some money away in a place where it is far more certain to make more, and you have five, ten, twenty or 30 years to let it grow... that's investment.

 

Share this post


Link to post
Share on other sites
51 minutes ago, Ken Grubb said:

I remember when it was 1.5 or 1.6.

You previously asked about Forex.

Over time, company stocks, especially those held by mutual funds into which you can directly invest, perform above all other investment options, including bonds and cash instruments.  If you want to put your money into such a place for a long time, and let it grow, that is investment. As I understand it, stock mutual funds tend to yield some 15%. But they fluctuate a lot. That is why, when you get close to the time when you will need the money, you should gradually transition your money into bonds, or a bond mutual fund. Lower, fluctuation, and lower interest, but the return is more sure. Then when you need the money, you should transition more into short-term "commercial paper" which is very short-term debt instruments. All of this can be done with mutual funds.

T Rowe Price even offers "Target Date" mutual funds which will create a retirement plan for you based on what date you want to retire.

What I said above is investment. That is, putting money into an investment, so your money will grow.

Forex trading is not investment. Forex trading is gambling. There is certainly nothing wrong with Forex trading. Theoretically, you could start trading right now with 1,000 USD, and tomorrow have 1,500 USD. Or 500 USD.  If you have money to burn and want to give Forex trading a try, by all means do so. But if you are interested in putting some money away in a place where it is far more certain to make more, and you have five, ten, twenty or 30 years to let it grow... that's investment.

 

15% yearly?!

In my country some of the banks give 20 % yearly, however the inflation rate is really high. For example last year one dollar was 38000 IRR. Now, it is 45000 IRR. This is inflation!

So, I should first choose the country I want to live forever, and then turn to bonds stocks and ...

I think I cannot certainly put my money in just specific investment. First of all, I have not a lot of money. Also, the country I want to reside is unknown!

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now


×