Storing money on US bank with high interest and secured(Arc.tech)

[romalo]

Interesting topic for all who see the world is unstable: ARC.tech bank in the US offers 5% interest and secured up to 5 million usd.

I have a old EU company, interest rate is super low and money only secured up to 100.000€
Idea: open a US company, let it sleep, but use the US bank account to store the money.

My accountants lawyer: If you have multiple entities, and use each others bank accounts, it is possible(i'm 100% shareholder) , but you need to setup a document/agreement that explains this and is clear that the money belongs to company A and not B.
I already do this with without problems: Like selling my expensive Villa, no personal bank account accepts a transfer of millions these days, so the buyer paid to my business account. As adviced by my accountant.
Fiscally dont put it in the books as income or loan.

My thoughts about the US strategy:
- There is profit generated by the interest, on the soil of the US because in this case it is a US bank. (its a weak argument because many banks are offshore.)
- But it is the US so risky, need to be sure. My advisors dont really know.

- Does anybody here know about this?
- What are the risks? a warning, a ticket?(no blabla horror stories pls! )

I prefer to let the US company sleep because its not used at all. It's not a loan, so what should I report? Only the interest? (But my agreemement would also say also the interest profit belongs to the EU company.)

Thx in advance and maybe more peeps are into this topic?

 

[thomasparra]

Why would you do this versus opening a corporate brokerage account in Europe and invest your treasury in a safer product that also generates more yield at 5.5% today?

 

[romalo]

Thx for the reply. Not sure if I understand you well, but the interest is without fixed deposit or period of time. I can get the money whenever I need it, and its insured by the Federal Deposit Insurance Corp (FDIC) up to 5 million. So its safer then anything else?

 

[thomasparra]

Thx for the reply. Not sure if I understand you well, but the interest is without fixed deposit or period of time. I can get the money whenever I need it, and its insured by the Federal Deposit Insurance Corp (FDIC) up to 5 million. So its safer then anything else?

The investment I am referring has a fixed duration but can be resold anytime without a loss/penalty, and with a minimum of $1,000 with no maximum threshold. It is also safer than any FDIC insured banks, including Tier 1 banks such as JPM or BofA - and you can buy it through a broker, which account you would open with your company.

 

[Martin Everson]

Yeah what OP suggests is just simply wrong.

You just put your money into a AAA Cash Liquidity Fund via your bank and be done. You get diversification via the fund also. Your EU custody account is already ring fenced from BRRD in EU. This is also what a lot of corporations and investors do with excess capital that exceeds bank deposit protection.

Example of Liquidity Fund include the below JPM one which yields 5.24% currently.

JPM USD Standard Money Market VNAV A (acc.) | J.P. Morgan Asset Management

View performance data, portfolio details, management information, factsheet, regulatory and other documents

am.jpmorgan.com

You can deposit and withdraw at any time with no fixed term conditions whatsoever. You can access such a fund via a bank (also broker) like Flatex in Germany.

P.S Single bank issuer investing is a huge risk as is any kind of FDIC insurance. FDIC as I discussed almost went under during 2009 financial crisis was days away from going bust. You should not rely on it being there to help you. See below.

Can USD kept outside the U.S.A be devalued?

I have no right to enter the U.S. whereas I do have a right to enter and live in the UK as a British citizen. So USD is not really "my currency" but I need to use a lot of it because it dominates the financial markets/investments. How possible do you think it is that one day they announce that...

www.offshorecorptalk.com

 

[romalo]

Super usefull info!
I had to do this wyoming LLC anyway for one extra webshop I created with Firstbase(therefore the Mercury+ARC account), so I thought the bankaccount would benefit the EU company as well.

But you also give some nice alternative options here for the EU companies I have.

Thx !

 

[romalo]

Yeah what OP suggests is just simply wrong.

You just put your money into a AAA Cash Liquidity Fund via your bank and be done. You get diversification via the fund also. Your EU custody account is already ring fenced from BRRD in EU. This is also what a lot of corporations and investors do with excess capital that exceeds bank deposit protection.

Example of Liquidity Fund include the below JPM one which yields 5.24% currently.

JPM USD Standard Money Market VNAV A (acc.) | J.P. Morgan Asset Management

View performance data, portfolio details, management information, factsheet, regulatory and other documents

am.jpmorgan.com

You can deposit and withdraw at any time with no fixed term conditions whatsoever. You can access such a fund via a bank (also broker) like Flatex in Germany.

P.S Single bank issuer investing is a huge risk as is any kind of FDIC insurance. FDIC as I discussed almost went under during 2009 financial crisis was days away from going bust. You should not rely on it being there to help you. See below.

Can USD kept outside the U.S.A be devalued?

I have no right to enter the U.S. whereas I do have a right to enter and live in the UK as a British citizen. So USD is not really "my currency" but I need to use a lot of it because it dominates the financial markets/investments. How possible do you think it is that one day they announce that...

www.offshorecorptalk.com

Martin thank you for your reply.
I tried to investigate but I do not see any EU bank coming close to the deals I can get in the US.
Arc.tech (JPmorgen) I get 5-5.6% interest as well on 1 month Bonds. Both extremely secure risk free options.
I had to open this US account+company anyway. But I'm not sure what to do with lts of money I have on my EU bank, which now gives 2.2% for 1 year contract. That is very poor.
All EU comparison sites give poor results for variable or short term contracts. Who gives a good deal?

ps. I'm talking about EURO's. The high interest rates I see from JPM (like arc.tech which i use now) are all USD

 

[wellington]

Interesting topic for all who see the world is unstable: ARC.tech bank in the US offers 5% interest and secured up to 5 million usd.

I have a old EU company, interest rate is super low and money only secured up to 100.000€
Idea: open a US company, let it sleep, but use the US bank account to store the money.

My accountants lawyer: If you have multiple entities, and use each others bank accounts, it is possible(i'm 100% shareholder) , but you need to setup a document/agreement that explains this and is clear that the money belongs to company A and not B.
I already do this with without problems: Like selling my expensive Villa, no personal bank account accepts a transfer of millions these days, so the buyer paid to my business account. As adviced by my accountant.
Fiscally dont put it in the books as income or loan.

My thoughts about the US strategy:
- There is profit generated by the interest, on the soil of the US because in this case it is a US bank. (its a weak argument because many banks are offshore.)
- But it is the US so risky, need to be sure. My advisors dont really know.

- Does anybody here know about this?
- What are the risks? a warning, a ticket?(no blabla horror stories pls! )

I prefer to let the US company sleep because its not used at all. It's not a loan, so what should I report? Only the interest? (But my agreemement would also say also the interest profit belongs to the EU company.)

Thx in advance and maybe more peeps are into this topic?

You want to put a sizable amount of $ into the illiquid US banking system - which either is backed by the FDCI which itself is illiquid (0.06$ on the $) which is backed by the US Treasury (which is bankrupt) selling bonds (with bond sales failing) supported by the Federal Reserve which is loosing 100 billion a month?

Are you f*****g mad?

80% allocation to gold
5% allocation to bitcoin
15% allocated to multiple banks under the banking protection schemes

If the banks collapse by March (likely) they debase the currency - your gold will offset the real value loss, Bitcoin will provide a handsome profit and you’ll have working capital nominally the same but spending power loss admittedly for the day to day.

Alternative is SGD it’s reportedly of of the most indebted country - it’s not - it should fly against currency debasement as their method for determining is flawed.

Oh and FYI there’s onchain exposure to Tbills - which means instant liquidity 24/7

 

[Martin Everson]

I tried to investigate but I do not see any EU bank coming close to the deals I can get in the US.
Arc.tech (JPmorgen) I get 5-5.6% interest as well on 1 month

That's in same range as Lux JPM fund I gave then - currently 5.27%. Please state which banks and products you are getting deals with also for transparency purposes?

But I'm not sure what to do with lts of money I have on my EU bank, which now gives 2.2% for 1 year contract. That is very poor.
All EU comparison sites give poor results for variable or short term contracts. Who gives a good deal?

ps. I'm talking about EURO's.

Are you talking normal bank deposits in EUR's or Liquidity funds?

HSBC Jersey gives 3.66% Fixed Deposit
Revolut Bank gives 3.95% (Liquidity Fund)
Barclays Jersey 3.60% Notice Deposit
etc etc

In any case choose what your comfortable with. Me personally I would never ever put money in US or even touch US dollars. But each to their own.

 

[romalo]

Just after I posted this I also saw Revolut making advertisement, just like you mentioned.

I contacted them, for now it’s only on personal accounts, and in the UK, they already started with business accounts, so will be a matter of time!

Nice detail is that personal accounts has the option to change euros to dollars for market rate. And then they give about 5.5% yield on Usd.

Depending on the country you live in, you can use your private account for business purposes.

Big limitation : insured up to max €100,000

Thanks