# Should I move my savings to Mexico?



## teresita7 (Jan 2, 2011)

Dear Folks,

I have been mulling the suggestion that I should move my savings from my US bank to my Mexican bank (HSBC) right now while the peso is low, and am getting conflicting advice. One financial advisor told me it's a bad idea as the economy is so unstable right now. Another one said it's the best time to do it, and that he is moving all his money to Mexico to take advantage of the lower peso price. Any thoughts? Many thanks in advance!


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## maesonna (Jun 10, 2008)

As long as you’re ready for anything. Things have happened to the peso in recent history that are much more drastic than anything that’s ever happened to the US dollar.
In 1994–5 there was a currency crisis. The peso was devalued and then it collapsed and it was redefined by lopping off three zeros. That is, every 1000 pesos was worth 1 new peso. (Which is why the Mexican currency symbol has been MXN instead of MXP since then – the N stands for “new”.)


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## TundraGreen (Jul 15, 2010)

If someone periodically moves dollars to pesos for living expenses, as I do, now is a good time to make one of those transfers, since the dollars will buy more pesos right now. I move enough for a month or two at a time.

But moving large chunks or all of one's assets is a different matter. Personally, I would not do that. Over the long term the dollar has been more stable than pesos. In the future it is a guess.


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## eastwind (Jun 18, 2016)

Ditto to what Tundra Green said. If "all your money" is not that much, and you are mainly living on some kind of pension income with a fairly limited bank account, it probably won't hurt you to move "all" your money. But I wouldn't move more than 6 month's worth of expenses max. Over time it all averages out anyway.

My personal take on the peso is that there are a lot of different things going on that have driven up the dollar or driven down the peso:

There is a liquidity crisis for leveraged hedge funds, and that has caused them to sell all sorts of assets to get cash, including selling gold. They are unwinding "carry" forex trades, and some of that is running up the dollar. This will soon be mostly mitigated by the fed's repo operations and QE.

There is the general flight-to-safety-in-volatile-times causing the dollar to go up.

There is the crash in crude oil prices, caused by the failure of OPEC to agree with Russia on production limits. This has affected the supply side for oil at the same time that the virus is affecting the demand side. That one-two punch crashed oil. The peso is considered a 'petro' currency, which gets stronger as oil goes up and weaker as oil goes down. Sio this is more of an effect on the peso than the dollar.

President Trump has given the order to fill up the US's national petroleum reserve (just this afternoon). That caused an immediate bump up in oil prices (about $2/barrel I think), as well as an immediate bump up in the strength of petro-currencies, including the peso. But the US can only buy so much as they have a limit to how much they can store. This is temporary price support.

It's going to take some time for the oil fight between Saudi Arabia and Russia to come to a truce, and oil is going to be cheap for a while, and that means the peso should stay weak for a while, even if it gets a little stronger tomorrow.

As the virus gets worse in the US the dollar might weaken but that won't last, because the virus will get here in another week or two, and then the peso should get a little weaker. 

As they do more and more QE that should weaken the dollar.

So there's a lot of "stuff" going on, pulling in both directions. Very hard to say what will turn out to be the most important factor. If I have to guess, I would guess it will be the price of oil. When that recovers, the peso will recover. 

I have visited the ATM every day for the last 4 days, building up a little more cash than I usually have on hand. That seems prudent to me both to take advantage of the rates and to have extra cash in case I get quarantined (voluntary or otherwise). I don't yet have a mexican bank account at all, but I am planning on opening one once my condo purchase is complete and I can use that as my address.


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## lat19n (Aug 19, 2017)

teresita7 said:


> Dear Folks,
> 
> I have been mulling the suggestion that I should move my savings from my US bank to my Mexican bank (HSBC) right now while the peso is low, and am getting conflicting advice. One financial advisor told me it's a bad idea as the economy is so unstable right now. Another one said it's the best time to do it, and that he is moving all his money to Mexico to take advantage of the lower peso price. Any thoughts? Many thanks in advance!


Do these advisors have a fiduciary relationship with you ?

I am a citizen of both countrys but reside exclusively in Mexico. Aside for the monthly social security monies the US sends to our Mexican bank and the very rare ATM withdrawal here in Mexico I have not exchanged dollars for pesos since 2015. We have enough pesos invested in Mexico that we can live on the 7% interest in government bills. I sleep better at night knowing that we are financially independant in Mexico. For example - we had more pesos at the start of 2020 than we had at the start of 2019. There is too much craziness in this world to have all ones eggs in one basket. If something truly bizarre were to happen - on which side of the border do you think it would occur ?

As for the price of oil and its affect on the Mexican economy - Mexico hedged the sale of its oil at $49 for 2020 and incurs a production cost of $35 per barrel. I'm not sure if that is before or after the cost of corruption.


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## lat19n (Aug 19, 2017)

Make that countries.


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## Bobbyb (Mar 9, 2014)

Having been through many devaluations moving all of your$$ is a bad idea. I also do not have any confidence in the Mexican banking system. There have been cases of credit unions defaulting and the Gov. said the deposits were not insured. Ask yourself why all of the world's billionaires have their $$ in the USA?


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## teresita7 (Jan 2, 2011)

Thank you all for your very thoughtful responses. It's not a clear-cut issue, but what in this world is?? I feel I have a better sense of the situation now. To answer @lat19n's question, one of the advisers has a fiduciary relationship with my mother, which made me want to seek further advice. Her quick "no" seemed like it might be more grounded in prejudice than fact. This gives me a much clearer picture. "Hedge your bets" seems like sound advice. Again, many thanks. Grateful for the opportunity to connect with you all.


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## Bobbyb (Mar 9, 2014)

I hope the OP has been watching the value of the Peso. If he had changed his small fortune into pesos a week ago he would have lost 20% of that fortune by now. With the world in a crisis and Mexico full of problems the Peso will likely fall even more. Add AMLO to the equation and it is even worse.


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## RetiredinPtoEscondido (Aug 23, 2021)

Us ex pat in Puerto Escondido Oaxaca since 2001. I would say no. Use your US debit card in Mexico. Your money is more secure in a US bank. The issue that I have is how to shield myself from a paper dollar collapse. Buy and build what you need in Mexico, then figure a regular cash budget for living expenses, then park your excess $ in physical gold bars in your US bank vault (sell as needed). So, if the US and or Mexican fake paper crashes, that you are protected. I see others on this forum moving to Mexico City? For godsake avoid it like the plague, dont fly into, nor drive through nor near it.


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## surabi (Jan 1, 2017)

RetiredinPtoEscondido said:


> I see others on this forum moving to Mexico City? For godsake avoid it like the plague, dont fly into, nor drive through nor near it.


Why would you say something like that without giving any context for your opinion? Many people love Mexico City- it has a vast multitude of things to offer, just as all cosmopolitan cities the world over do. Just because you like living at the beach doesn't mean other people don't prefer living in a big city.

I had a great time in Mexico City and would love to go back sometime. Not a great place to be during a pandemic though.


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## RetiredinPtoEscondido (Aug 23, 2021)

surabi said:


> Why would you say something like that without giving any context for your opinion? Many people love Mexico City- it has a vast multitude of things to offer, just as all cosmopolitan cities the world over do. Just because you like living at the beach doesn't mean other people don't prefer living in a big city.
> 
> I had a great time in Mexico City and would love to go back sometime. Not a great place to be during a pandemic though.


My bad.


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## trekmanone (Sep 13, 2020)

teresita7 said:


> Dear Folks,
> 
> I have been mulling the suggestion that I should move my savings from my US bank to my Mexican bank (HSBC) right now while the peso is low, and am getting conflicting advice. One financial advisor told me it's a bad idea as the economy is so unstable right now. Another one said it's the best time to do it, and that he is moving all his money to Mexico to take advantage of the lower peso price. Any thoughts? Many thanks in advance!


When I first moved to MX 5 years ago, Intercam Banco's 6-month CD yielded 7.5%! Yes, 7.5%. Minimum $550,000 mxn deposit in CD. MX economy was booming then. I created a 6-month ladder paying me every month. IN MX, you are taxed monthly and not annually as in Canada and USA. Your bank will pay your taxes for you (ISR) monthly off your yield.
You have 2 possible tax entities to consider, Individual and Corporation. There are no LLC, etc. Most individuals like us expats are Individual. In the USA, there are 7 tax categories. In MX there are like 35, all very small ones. If you just have bank interest, you don't need an accountant as your bank takes care of Federal taxes (ISR).
Since then, MX, and the planet's economy crashed due to pandemia thus MX central bank reduced interest rates significantly. It got so low I moved my money back to USA into dividend-paying stocks in the 5%-8% range.
Mexico banks are secure and internationally recognized especially HSBC so no problem with your money. The smaller banks you are on your own.
I guess the ultimate question is: why do you want your money in Mexico vs USA or Canada? Are you a permanent resident or a tourist visa kind of person? You can ATM out $6,000 to $10,000 mxn on a day use with ~$45 mxn ATM fee. Some USA banks waive this fee.
Given the current state of USA, it might be more riskier to have money in USA than Mexico.
I have a bank because I used to own a business in Mexico. Now I use my bank to pay bills via wires.
Hope this helps.


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## Isla Verde (Oct 19, 2011)

surabi said:


> Why would you say something like that without giving any context for your opinion? Many people love Mexico City- it has a vast multitude of things to offer, just as all cosmopolitan cities the world over do. Just because you like living at the beach doesn't mean other people don't prefer living in a big city.
> 
> I had a great time in Mexico City and would love to go back sometime. Not a great place to be during a pandemic though.


I have been living in Mexico City since I retired here in 2007. I sometimes refer to it as the Mexican "Big Apple", where I lived in the 1990s. Though the city is huge, you don't live in all of it - especially in these weird times, I spend most of my time in my pleasant middle-class neighborhood, where everything I need is within walking distance. And when I finally start moving around the city again, public transportation is nearby, inexpensive and safe. What more could I want?

As far as the pandemic is concerned, I feel safe here in my civilized "bubble", a few blocks behind the US Embassy. My neighbors wear masks where required, especially in stores and restaurants. And there are never large crowds of unmasked people on the street.


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