HELOC stratergy


You can open a Heloc first to make sure the bank will agree to give you a Heloc. After you get a Heloc that’s large enough for your emergency needs, you can pay your idle cash into your mortgage.

But if you can get huge interest rate in India and the Indian currency does not drop significantly, it would be a good deal to deposit in India to earn the high interest rate.

I’m still puzzled by the high interest rate in India and its relatively stable currency. It seems too good to be true


USD to INR is risky. When FED rate is hiked, USD gets stronger.


From 2013, Indian rupee was stable. But historically, it was volatile. If you are concerned about Rupee, Heloc and pay down mortgage is good. But 3.5% is too good to pay down.


I would spread the risk. Put about 30k into the INR FD but be prepared for the forex risk. Do a backdoor roth and put $5500 in there and buy dividend stocks. Invest some in realtyshares maybe 20k. Take small bites of some less volatile stock like AT&T(T). Whatever remains you can consider paying down mortgage/heloc.


@sanfax I thought these rates are decreasing with RBI cutting down rates, any idea on the recent rates?

Like others said here forex conversion is the big risk for me. There are some saying USD INR will hit 80.

Plus demonetisation has put all the blocks on investing in real estate in India. Im stuck with my indian RE investments in the foreseeable future


Be wary of Indian rupee & it’s history of long term depreciation against the $.


INR FD is not good option. I am sure sanfax would have fully used IRA and 401k…etc. Mostly, whoever got GC/Citizen and a Bay Area home always settles/retires in USA.

Anything non-liquid (other than real estate) avoid. You need liquid savings/investments.

There are some investment rules. (Bogle’s investment or retirement guide)

  1. Max Roth IRA (if eligible)
  2. Max company matching 401k
  3. Depending on age, partially contribute Roth 401k and balance traditional 401k.(together 18k)
  4. If after tax 401k is available in your company, fully utilize it.
  5. Excess, invest in stocks or real estate.
  6. Every investment review tax implication or tax efficiency as that may eat away your growth.

Stocks or bay area real estate is the best option. You learn a lot by educating yourself.

In stocks, best option is find out good dividend paying company at low cost or at low tide.This is hard to find, but not impossible. This is exactly like bay area rental home, you get some cash flow while your investment is growing at steady phase.

One example, I just took some AAPL stocks at $94 when I heard Buffet company bought it, sold some for profit taking and keeping balance forever to get dividend. This is frozen now until my retirement.

There are plenty here holding such dividend paying company, but watch out and buy it at low tide.

Even in stocks, if the people have doubts, they can either choose SPY or ONEQ or BRKB as an option until they learn proper investment strategy.

If you are new to stock and using small amount less than $5000, first open or use Robinhood, a commission free trade platform.


I was not aware of the high fixed deposit interest rate in India. The more I think about it, I am asking whether india’s high interest rate has reduced Indian engineer’s enthusiasm to buy house in Bay Area?

It would be very attractive for an Indian engineer to deposit his money in India and earn 7-9% interest rate, or buy a house in India to enjoy the higher appreciation due to its high inflation.

What’s the mortgage rate in India? Is it over 10%?


My challenge is how do I bring the money back to US where I live? and the forex fluctuations


Is Indian rupee freely traded? You can convert rupee to dollar and wire here, right?

If you can get 8% fixed rate for deposit for long term, forex exchange can be ignored. It’s not likely for rupee to depreciate at 8% for the long term.


I have to pay tax like ordinary income in the US. So 8-9% plus 40% tax is not attractive for me. Just checked, its 7.1% for 1 year FD.


You also pay the same 40% when you get a 1% interest for your savings. There is no way abound that.

But you can give your parents $20k gift every year. Later, your parent will give you a big gift of 200k after some years for you to buy a house in BA


IS this possible to gift parents living overseas?

Long story short, not a lot of indian engineers put money in FD in INR instead of buying primary in the bay area. Below chart is my primary concern.


You should be able to give gift to anyone in the world, as long as you don’t send money to terrorist groups :slight_smile:

Does India charge a tax on interest income? You need to consider how much tax you parents will need to pay on the interest.

Currency is hard to predict. I was curious that Rupee has be stable in the last 3 years when USD gains over all the other currencies.

I’m surprised by the consistently high inflation in India. What’s the reason for the high inflation in decades?


High inflation in India - enormous population, middle-men in supply chains , not enough growth in agriculture leading to importing food.


I share RealEstateBull’s pain. With the demonetization activity, there is no way to unlock RE value in India now. You have to wait for a few years till Modi (current PM) is out of the office. Don’t get me wrong - what he did was to combat black money ( unaccounted and untaxed ) flowing into RE. The problem is that at least in the cities the middle to high end individual buyers buy with regular, accounted cash and now even they are affected. Until the dust settles, RE transactions will be slow for the next few months in India.


Demonization is forcing people to deposit the cash, that would earn them high interest rate. By itself, it seems neutral to economy.

But there is a limit for exchange of old bills to bank deposit. If someone holds a lot of cash, does most of his cash become worthless paper? That would be a confiscation of people’s cash property. That could reduce the inflation a lot, but it’s a robbery of personal property

Maybe this demonetization could force Indian engineers to buy houses in US and leave their money outside of India. It’s really scary to see your money becomes worthless overnight.

But if this causes Indian housing crash, we should go there and buy houses and condos as investment.


Only 3% of India pays tax and 90% transactions are in cash. I totally support this move by Modi (takes guts to do this move), but short term pain across all industries is felt. Imagine 30% tax payers in Indian population, future looks bright.

There will be a lot of correction in 12 mos. Folks who financed properties (unorganized financing) and need to liquidate will be in trouble. Waiting for this to happen.


Inflation in India is about 3.5%. So the real return for a 7% bank deposit is just 7 - 3.5 = 3.5%. Not worth the additional risks like forex and political. I’d much rather just put it all in S&P 500 index fund.


Keep it Simple. If your parent is in India and you’re the only son, you’re sure to inherit their wealth. So don’t bother to put money in India. Just leave it in USA. Diversification. You don’t know what future would bring. So some wealth in India, some wealth in USA. Keep them separate. Avoid moving money to and fro.