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Question from Reader: Swiss Bank Accounts

This article was written by in Saving. 13 comments.


Here’s a question I received from a reader regarding the Premium Certificate of Deposit accounts at Millennium Bank:

Have you ever heard of a bank called Millennium Bank? They are Swiss, not FDIC insured, and will give me 7.25% on a 1-year CD, which is not redeemable until maturity. I really want to do it, but I’m hesitant because they’re not American and not insured. If you’ve heard anything about them, I’m more than willing to listen.

swiss-flag.jpgI answered the question to the best of my limited knowledge. A deposit at Millennium Bank will likely be safe, despite not being insured by the FDIC. However, there may be hefty undisclosed fees for maintaining an account with the foreign bank as an American citizen. These fees would likely eat into the interest income.

If there are any Americans with experience with a Geneva-based savings account similar to the one offered by Millennium Bank, please feel free to write in with a comment below to describe your satisfaction, problems, and anything else you’d like to add. I don’t expect many readers to have this experience, but it never hurts to ask.

Updated February 10, 2011 and originally published February 6, 2007. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 13 comments… read them below or add one }

avatar MoneyFwd

I looked into this bank and one point, but couldn’t find anything about fees.

As for the lack of FDIC insurance, their explanation was that the insurance was more of a historical thing that doesn’t matter as much anymore, so it shouldn’t be something to think about.

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avatar tinyhands

First, why would the FDIC insure a foreign bank? It has nothing to do with history.

Millenium Bank is located in the St. Vincent & the Grenadines, W.I. I can’t say definitively whether it’s association with the ‘United Trust of Switzerland’ makes it a “Swiss Bank”. The bank certainly offers no protection to the investor. In fact, one of the applications says that they abide by the banking laws and regulations of St. Vincent & the Grenadines, nothing about Switzerland.

Honestly, the whole website strikes me as suspect (especially the last sentence on the ‘About UTS’ page), the kind of thing I’d expect to see on Dateline or 60 Minutes. It would be one thing if you lived-in or regularly visited this place. It’s awfully far away should you ever need to appear in court to challenge something.

Lastly, the minimum investment to get the 7.25% rate is $25,000. I respectfully suggest that someone with $25,000 in cash, who is also willing to lock up that cash for 12 months, may need to rethink his portfolio.

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avatar mapgirl

WAIT A SECOND HERE.

That Millennium Bank is not the same Millennium Bank listed last year in the Wall Street Journal as having good CD rates. There is a Millennium Bank in Virginia which offers really good rates on 180-day CD’s. I invested in one of those last year and was quite happy with them. And because it was a US institution, it was FDIC insured.

Could that possibly be a domestic alternative for this reader?

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avatar ES

if you have $25,000 in cash, private trust deeds offer a much better return.

I just had a post about it on my webiste. look for “boosting passive income”.

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avatar Matt

I’d be rather dubious about this institution, actually, and I’m not saying that out of any love for US banks or the FDIC. (The overwhelming majority of my net worth is in corporate accounts outside the United States, and likely to remain there for the foreseeable future.)

Offshore savings and investment is not for the faint-of-heart dilattante. It’s a serious business, and avoiding scams takes quite a bit of research and effort. An institution that makes a comparatively big deal about purported Swiss ownership, but which is not in Switzerland sets off alarm bells for me. As does the bit about their corporate parents not having a web site. (Plenty of corporations still don’t, which isn’t proof of anything. But trying to sell this as a kind of pro-privacy feature speaks to me of an organization trying to lure in the gullible, rather than one that’s merely behind the times.)

I have no actual knowledge that this institution is fraudulent, and am not claiming that they are. But I will say that putting money offshore requires a great deal of caution and research, and that this institution would not be on my shortlist, or even be considered at this point.

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avatar CS

I guess I am gullible. I invested with milliniem bank. So far it seems to be legitimate. I guess Sept 2008 I will be able to give a substanstial testimony. Anyway ES can you tell me where I can get more information about private trust deeds. Can you really get a better return than 8%.

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avatar April

I am considering investing with Millenium Bank and a manager has been in touch with me. If I may ask, how long have you been investing with them and how much were you comfortable with? Sep 2008 has come, how did it work out? Do you still think they are legitamate? Should I invest at least 25K? Did you get info on “private trust deeds”? I noticed that comment too. I’d appreciate your reply.

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avatar TheLoanRanger

Generally, the higher the rate, the higher the risk of losing your pricipal. Trust Deeds can earn up to 20% and more, especially if you’re charging points, and / or pre-payment penalties, especially if they pay off early. But you can also lose everything if your not experienced, or at least very well trained. One training course (john Stephanchic) was just busted by the Feds. See FTC site for details. In CA, some R.E. Brokers will put your funds to use, (find a needy client), legally arrange the paperwork, and advise you of the pitfalls. Be sure they’re reputable and have many years of experience. They generally keep most or all of the points, but usually give you the interest and prepayment penalty if any. Shop around.
In 2007, I paid 12% plus 4 points for a (1st TD)loan on half the value of a vacant lot. The 50% LTV would go up to 65% or 70% if there were a decent building on it. 2nd TD positions are a bit more risky, but if you stay under 65% of today’s value of the property, (inspect and be cautious of the appraisal), you’ll probably be OK. Be sure to keep about $15,000 or more available in your FDIC insured institution for legal fees in the event they don’t pay and you need to foreclose. Keep in mind if you’re in 2nd position, you need to make the payments on the 1st TD during foreclosure. If the borrower can declare bancruptcy, that could drag on up to three years or more.

You might also research State Tax liens or Tax Deeds. There is a course on it that provides a booklet with what each state pays, some up to 18% with conditions. You may be able to find a used copy on the internet sales outlets. Good luck.

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avatar Prof Jake

THESE GUYS ARE CROOKS. STAY AWAY FROM THEM. They used to be swisstrustgroup.com. They are NOT, in fact, Swiss, and there is no information in Switzerland regarding this company.
The CIA has data on them.
STAY AWAY!!!!

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avatar Davy

Hey, CS, if any luck with Millenniun shoot me an e-mail.Are they Swiss affiiated? Thanks!

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avatar Moose

CS,

Were you able to retrieve your matured CD money from the Millennium Bank after Spetember of this year?

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avatar Mike

Millennium Bank and Trust of St.Vincent (Supposed Swiss Account) has been placed in recievership as of March 26, 2009 as another Maddoff like Ponzi scheme. Check out the SEC site http://www.sec.gov/litigation/litreleases/2009/lr20974.htm

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avatar Tonya Day

My mother left me an accout at the Corner Bank in the Bahamas. After my mother’s death I tried to retrieve the money. This bank refused to do a search, refused to send me a dormant account claim form & instead of signing an affidavit that my account did not exist at thier bank, they spent hundreds of thousands of dollars to prevent any search. And like your bank, the Corner Bank is a Swiss bank with a location in the Bahamas. My advise would be to stay as far away from this type of banking as you can because you will no legal recourse to retrieve your money. There is also a web site about the millenium bank scam busted by the SEC http://www.offshoremet.com/2008/03/caribbean-millenium-bank-scam.php you should check it out.

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