Kev374, I think you are oversimplifying the risk. I woudl not have the courage to deposit it any private bank there,and I deal with global banks on a daily basis(Indian banks as well)…cash under the mattress may be better suited vs. a deposit with I-C-I-C-I.

My 2 cents

[quote=kev374]Planning to move out about $160,000 over to India where the interest rates are 9.5% annually. The Rupee has seen some volatility lately but I feel that it has hit a high of 62 to a dollar and the downside risk is small. Even if it goes to 70 to a dollar then it’s about a years worth of interest anyway.

I also know I have to fully disclose foreign interest earnings and pay tax on it. I figure I will pay 28% Federal tax (as that is my marginal rate) and currently 9.3% CA tax as well, so total of 37.3% of my interest will vanish in taxes but I pay the same taxes on my current pathetic interest income of 0.8% anyway. No way to avoid that!!!

I figure if I move to Texas next year then I will avoid the 9.3% state tax on my interest and my money could compound quite well.

My questions are – what are some of the downsides of transferring large amounts of money out of the United States to chase better interest rates elsewhere?

Another point to note, I am originally of Indian origin but i’m a US Citizen…however I have special OCI status in India (Overseas Citizen of India) which gives me parity with Indian citizens for banking, residence and employment purposes.[/quote]