Should an Expat Park Cash For Profits in an EC Bank or Credit Union?

Even higher rates of interest in the 10 % range are possible at credit unions or cooperas in Ecuador.

However, Dom and I recommend against investing at these credit unions because they typically are not covered by FDIC-type deposit insurance.

Several years ago, a coopera in Cuenca failed after officers of the organization looted the treasury.  Numerous Expats lost big bucks.  They held meetings and consulted with government banking officials, only to decide they had no viable recourse.

Another factor Expats should consider is that money wired out of Ecuador is taxable by the EC government.

cccmedia in Quito

For the list of banks and institutions covered by government deposit insurance up to $32,000, visit the page-link below.

The agency's name is COSEDE, which stands for Corporación de Seguro de Depósitos (Corporation of Insurance for Deposits)....

www.cosede.gob.ec/wp-content/uploads/20 … OSITOS.pdf

-- cccmedia in Quito

But I believe there is a 5% tax on bank account withdrawals which exceed $3,000 in one month? So it seems to me that if you ever took your money back you'd end up paying a lot of the earned interest in taxes, si?

The 5 % tax affects wire transfers.  Cash can be taken out of the bank and onto a plane -- up to $10,000 -- without penalty, although carrying that much cash in Ecuador is not advised.

As to your basic point, yes, wiring money out would reduce the apparent profits gained from interest.

cccmedia in Quito

Just as a reminder to new posters, we should link to the 5% tax law in question -

http://translate.google.com/translate?h … 6bih%3D626