Getting $$$ in your portfolio

Interactive Brokers is also giving 4.08% on USD (a bit less on GBP and EUR). Great one stop shop for SA investors wanting offshore exposure, and easy to open an account. If you can get options permissions you can also do box trades and make around 5%.

Dont want to derail the thread, but can you give more insights on the options trading with 5% and at what risk?
 
Dont want to derail the thread, but can you give more insights on the options trading with 5% and at what risk?

Check out boxtrades.com. Pick an expiry date and they'll give you a trade like this:

Sell 1 SPX 16JUN23 4000 CALL
Buy 1 SPX 16JUN23 4000 PUT
Buy 1 SPX 16JUN23 5000 CALL
Sell 1 SPX 16JUN23 5000 PUT

For an effective rate of 4.9% P/A.

Since these trades are on European style options (SPX), there is 0 risk of early exercise . Also, brokers are very tightly regulated (more so than banks) and SIPC protected, so it's about as safe as you can get. You can also inverse the trade to borrow money from the market at a fixed rate, almost always cheaper than a broker (even IBKR who have the lowest margin rates of all brokers).
 
Interactive Brokers is also giving 4.08% on USD (a bit less on GBP and EUR). Great one stop shop for SA investors wanting offshore exposure, and easy to open an account. If you can get options permissions you can also do box trades and make around 5%.

Correction: just got a notification that it's increased to 4.33%. Pretty good for instant access in USD.
 
Strange. That is not what the 3 banks told me when I was there in person to open my accounts the past 12 years. And, these were 3 banks in 3 different States.

In fact, I still have all 3 my accounts and to this day I still do not earn interest on any of them.

Maybe you could help me to get that corrected? Seems you deal with US banking to make this claim?

I understand that if you work through local banks, they will offer you interest, but opening and owning an account directly with the bank offshore prevented me from earning interest due to their laws. Only thing is, I do not want to work through local banks using their accounts. I wanted my own offshore account which has nothing to do with SA or local banks.

Oh, and one last mention, even if you are in the US and visit a bank in person and open an account as a foreigner, you cannot open a savings account at all. The only accounts they will help you with are non-interest bearing Check or Business Accounts. Even if you have an ITIN, you still are not allowed to open a savings account. Also the reason I currently have 3 check accounts.
From a SARS perspective, if you look at your income tax return (ITR12) you will note income code 4218 is specifically for foreign interest earned, which you need to to declare. The 2023 interest exception of R23,800 is not applicable to foreign interest.

From a SARB perspective, their exchange controls dictate that any SA business entity is allowed to open a foreign bank account if you conduct business abroad HOWEVER, any credits against such an account (except for foreign dividends) MUST be repatriated within 30 days. If you therefore have an SA business and have sales in the US (or any foreign country), the income earned from said sales that are deposited into the business' foreign bank account MUST be returned to SA within 30 days from being accrued in the account. There is no restrictions on earning foreign interest by an SA business from a SARB perspective.

https://www.resbank.co.za/content/dam/sarb/what-we-do/financial-surveillance/financial-surveillance-documents/2020/Currency and Exchanges Guidelines for Business Entities.pdf

1679577161715.png
In terms of individuals, any SA resident is allowed to open a foreign bank account for the reasons specified.

https://www.resbank.co.za/content/dam/sarb/what-we-do/financial-surveillance/financial-surveillance-documents/2020/Currency and Exchanges Guidelines for Individuals.pdf

1679577745231.png

The conclusion is that nothing stops you from either as a business or as an individual to opening a foreign bank account or to earn interest on that account. That is of course dependent on the foreign bank willing to open an account for you as all banks have to comply with certain exchange and anti-money laundering restrictions which limits their trading ability.

The fact that the US banks don't want to pay you interest has nothing to do with any SA policies or restrictions. It is Let's Go Brandon that is taking your interest for his own pocket. US banks also have their own policies so it may very well an individual bank's policy or the state's policy that stops them from paying you interest - it is not because the SA government (through the SARB or National Treasury) restricts this.
 
From a SARS perspective, if you look at your income tax return (ITR12) you will note income code 4218 is specifically for foreign interest earned, which you need to to declare. The 2023 interest exception of R23,800 is not applicable to foreign interest.

From a SARB perspective, their exchange controls dictate that any SA business entity is allowed to open a foreign bank account if you conduct business abroad HOWEVER, any credits against such an account (except for foreign dividends) MUST be repatriated within 30 days. If you therefore have an SA business and have sales in the US (or any foreign country), the income earned from said sales MUST be returned to SA within 30 days from being receipted in the foreign bank account. There is no restrictions on earning foreign interest from a SARB perspective.

https://www.resbank.co.za/content/dam/sarb/what-we-do/financial-surveillance/financial-surveillance-documents/2020/Currency and Exchanges Guidelines for Business Entities.pdf

View attachment 1497295
In terms of individuals, any SA resident is allowed to open a foreign bank account for the reasons specified.

https://www.resbank.co.za/content/dam/sarb/what-we-do/financial-surveillance/financial-surveillance-documents/2020/Currency and Exchanges Guidelines for Individuals.pdf

View attachment 1497303

The conclusion is that nothing stops you from either as a business or as an individual to opening a foreign bank account or to earn interest on that account.

The fact that the US banks don't want to pay you interest has nothing to do with any SA policies or restrictions. It is Let's Go Brandon that is taking your interest for his own pocket. US banks also have their own policies so it may very well an individual bank's policy or the state's policy that stops them from paying you interest - it is not because the SA government (through the SARB or National Treasury) restricts this.

Take a look at my comments again. I am not saying you cannot earn interest abroad. Many investment houses offer you the opportunity to invest through them and even earn interest on money in your account with them, or even money borrowed to other investors.

What I am saying is that you will not get an interest bearing bank account in the US if you are a South African citizen. It has nothing to do with SARS, the ANC, South Africa's laws. It is the US's own laws that prohibits it.

Been there, tried it. Also, I used to have very little money in my bank accounts there. It was moved to my trading account which actually offered a small interest rate on a positive balance.
 
As a South African you may not have an interest-bearing bank account abroad. Due to this, most banks across the globe will offer you a bank account, but you will not receive any interest on your funds. But, also check out Transferwise.com. I remember getting an email earlier this month where they now claim that they will share the interest they get from deposits with users. I have not followed up on this, but it may be worth your while to see what they offer.

I did have a look at your comment again (see above in bold).

My last post was a response to that i.e. showing that any SA resident or SA business is fully entitled to have a foreign interest bearing account.

The fact that US banks don't want to offer you a savings account is all down to this: https://www.fincen.gov/resources/statutes-regulations/usa-patriot-act
It also applies to most foreigners, not just South Africans.

I'm very surprised that a US bank offered you a bank account in your personal capacity (not business) without a Social Security Number.

These guys in Puerto Rico seem quite willing to assist.
https://zenus.com/en/personal/manage-your-money/us-banking-for-foreigners/
 
I kept reading the first $ as an A. My brain got it right finally. Moving on...
 
  • Haha
Reactions: 3WA

Before you posted this link, did you read the terms?

Untitled.png


Again, you will not open a US bank account, at any bank, whatsoever, and get interest.

And, oh, by the way, you are more than free, if you are in the US, to open a bank account with most banks as a foreigner. You can do so with your passport and South African proof of residence. This is how I did it at Wells Fargo and Citi Bank in New York. But, the catches to all these accounts are that you will never earn any interest on money held in your account and it can only be a check account.
 
The link was in reference to SA residents opening a US account while being non-resident and not having a US address or SSN.

SA is not on the country exclusion list and therefore you should be able to open account.

1679581411701.png

And you should be able to get a debit card soon:
1679581494830.png

US banks are not required by law to pay interest to non-resident savings account holders, and many banks choose not to do so for various reasons (including the act I linked above, tax reporting requirements, tax withholding rules etc).

You may want to investigate HSBC, Bank of America, Wells Fargo and City Bank if interest earned as a non-resident on US domiciled savings accounts is you main prerogative.
 
I have interest bearing accounts in several countries.

For the US specifically you need an SSN or ITIN to have an interest bearing account. That's a US specific thing, not a worldwide thing, or a South African SARS thing. I get to pay US income tax, and have to fill in a W8BEN each year on interest earned each year, even if its not that much, and I'm not a US citizen.

But that is different ... you have an ITIN no.

Most SA'ans do not.
 
But that is different ... you have an ITIN no.

Most SA'ans do not.
Most South Africans also don't have US accounts.

Just pointing out that yes, you can get interest (although US rates are mostly to low to bother with for that). If your money is sitting there earning interest, its also depreciating as its losing value.

Sure, slightly better than no interest at all, but ideally you want your money working for you, whether its in investments, or trading, property, or something else.
 
So, I made a deposit (Shyft to IBKR) a few months ago and it worked fine. Reflected a few hours later in fact.

Today it seems the payment is working through Revolut? These are ACH payments made via Shyft.

Initial Description: Transfer Confirmation Required.
Response from IBCS at 03-Jun-2024

Dear Client.

We received a USD deposit for your IBKR account U******* from Revolut.

However, we are unable to validate the deposit comes from a Revolut account held in your name, so the deposit is under Compliance review.

To expedite this review and to ensure that your deposit is not rejected, please download the Transfer Confirmation for this deposit from Revolut and attach it to this ticket.

Please make sure to attach the Transfer Confirmation in PDF format, not as an image.

To avoid delays on future deposits from Revolut, we recommend funding in another currency (e.g. EUR or GBP) or using the 'Link a New Bank Account' deposit method to link your USD Revolut account to your brokerage account.

As a reminder, deposits from an account not in your name (whether from Revolut or elsewhere) are not permitted.

Regards,
Interactive Brokers Client Services

Anyone come across this or dealt with it as yet?

Update: Managed to come right with this. Email Shyft support and get documents to give to IBKR regarding the transaction. Sorted.
 
Last edited:
anyone know how to deposit money from your Shyft account (in USD) to Interactive brokers so your account can be activated?

1) the videos from the SA guy on YouTube are great, although now IB has been updated so things are different.
2) after much headache I am almost finished with the authentication (I think)
3) I downloaded the desktop version and tried to fund my account but it says I am not allowed to?
4) on the app it says "final steps to a completed application" and the only option left is "Fund your account"
5) if I click on that it now gives me these 6 options: (the YouTube guy says you must select "Direct ACH transfer from your bank" <-- not shown??

Bank wire
Link a new bank account
Transfer from Wise balance
Online bill pay
Mail a check
Transfer securities

I am now lost, FML why do they make everything a pain in the ass
 
Do you see anywhere that allows you to change your location or currency?

I believe they're hiding that option because ACH stands for Automated Clearing House, which is a US payment system only.

Your IBKR account being 'South African', they're probably disallowing that. Best is to email them and get them to enable it.
 
Top
Sign up to the MyBroadband newsletter