While depositing money in US dollars, euros, or British pounds in developed world banks can seem safe and should likely comprise a good chunk of your cash portfolio, there are other options.
There are also emerging world banks that desperately need US dollars or euros, and will pay handsomely for it.
This article is a rundown of the countries where you can earn the highest interest rates in the world today. Find out more about our tax planning and offshore banking services here.
The World’s Highest Bank Interest Rates
The Federal Reserve recently raised US interest rates to a range of 5.25% to 5.5%. – the highest level in 22 years. Efforts to stabilize prices, in the face of rising inflation, have been reflected in deposit rates for high-yield savings accounts.
Having said that, recent attempts to curb US inflation could make those rates artificially high, especially when you consider that monetary policy is fickle and subject to change.
There is a risk that foreign banks may not be as sound, but in many cases you can find banks that are supported or owned by larger banks or wealthy family offices.
How to Earn the Highest Interest Rates
While we wouldn’t rush to open a Turkish lira term deposit, there are other currencies that you can expect to appreciate or at least remain flat against the benchmark US dollar. That means that holding other currencies that return far higher interest rates can be beneficial.
Basically, you can get paid for taking one of two risks: institutional risk or currency risk. Those are both substantial risks, but with careful planning, you can eliminate all but the illusion of both risks. Typically, these are places that have relatively low risk, but which are perceived as high-risk by the average person.
After all, most people in the world outside of the western world are having their money returned to them, too. Invest in stable currencies in well-managed banks and, as long as you get your money back with interest, you haven’t lost anything but you did get paid more for the risk.You may even get more banking privacy.
With that said, let’s examine several of the countries paying the highest interest rates on your term deposits. But first, a disclaimer.
Information here is based on personal experience and opinions, and may change rapidly. You should always confirm interest rates and other material facts for yourself.
This article may not be continuously updated. Banking and investing in foreign countries and foreign currencies carries risk, and no blog or article can take your risk tolerance or personal situation into account. Use this information as a guide, but don’t rely on it with your own money.
Countries with the Highest Interest Rates
Let’s start just north of here in Georgia’s capital of Tbilisi. We’ve said before that Georgia is quite possibly the easiest place in the world to open a bank account.
While many banks are confused by FATCA or make the process unnecessarily slow, you can still open an account in Georgia with ease if you know where to go. What’s more, Georgia offers among the highest interest rates for deposits in its local currency.
Georgian banks have recently lowered deposit rates on US dollars, which seems odd seeing that US banks have raised theirs. If your goal is to hold dollars, you can do better elsewhere.
However, if you’re open to holding Georgian lari, the deposit interest stood at 11.69% in June of 2023. While the lari lost some of its value against the dollar a few years ago, it has held relatively steady ever since.
The largest banks in Georgia – TBC Bank and Bank of Georgia – are both traded on the London stock exchange and currently offer rates of 10.14% and 11.25% on one-year term deposits. The rates may be slightly lower for non-residents.
UAE-owned Terabank currently offers 12.20% on withdrawal at the end of a 12-14 month term. It also has a convenient branch in the Biltmore Hotel, although their process is slower.
Smaller banks may offer more or less, but generally, we’ve found these to be the best. Liberty Bank, the government’s designated bank for handling pension payments, is often mentioned as an alternative with its higher interest rates, but you’ll pay for the privilege with unsatisfactory service.
Furthermore, many smaller banks used to dealing with locals won’t understand why a foreigner wants to open a term deposit in Georgia, and you may well be rejected.
Like Georgia, Armenia offers high interest rates on its local currency, the Armenian dram. A forex trader we spoke to likes the recent fundamentals of the dram against the dollar, which has very low volatility as of late. Armenia’s reform-minded government has helped buoy the currency further.
Opening a bank account in Armenia is relatively simple. In fact, if you’ve opened an account anywhere in the former Soviet Union, you’ll likely see a lot of similarities in how things are done. There are several decent banks, although some of them have a less modern feel owing to Armenia’s greater orientation toward Russia. Two exceptions are Ameriabank and Evoca Bank.
Evoca Bank is almost too cool for school, with hip advertising painted across Yerevan, and a website that is a bit too sexy for a bank. As a smaller but growing bank, they’re also a bit more particular about new accounts crossing all of the “T”s before being opened. However, they do pay 9.5% on a one-year term deposit denominated in dram.
While Armenian banks don’t offer compelling rates on US dollar deposits, they do offer a rather unique opportunity for internationalization: holding Russian rubles. While any bank worth its salt offers dollars and euros, a relatively small number offer the ability to hold Russian currency.
Interest rates on the ruble are also a bit underwhelming given past volatility, but if you need or want access to the ruble as an alternative currency, Armenia is a great place to do it.
We might as well list all of the Caucasus countries, and Azerbaijan rounds out the list. Opening a bank account in Baku can feel labored, and can involve less English fluency than in Georgia or Armenia.
However, Azerbaijan is wide-open to foreigners opening accounts and the country now offers an easy e-visa program. If one banks’ FATCA form was any indication, they’re not exactly on the ball over there, which honestly may seem like a good thing but probably isn’t.
Azerbaijan has a LOT of banks, although at least one of them has been taken over by the central bank as of late. The International Bank of Azerbaijan and AccessBank are among the biggest and easiest to work with, although there are foreign banks operating there, too.
AccessBank currently offers 9% on a 12-month deposit in Azeri manat if you take the interest at the end of the term. (Many foreign banks allow you to take interest upfront or intermittently in exchange for a lower rate.) While the manat suffered declines against the US dollar several years ago, just as the Georgian lari did, it has historically been the least volatile.
Nomad Capitalist founder, Andrew Henderson, has been an advocate for investing in Cambodia since 2007. Cambodia has a small domestic market but is seeing huge investments from China now; the beach town of Sihanoukville saw housing prices double in just one year thanks to Chinese investment.
What many people don’t know, however, is that Cambodia has also seen an influx in banks. Everyone from Malaysia’s RHB and CIMB to Public Bank, as well as Bank of China and Bank of India, have joined longstanding foreign banks like ANZ in serving Cambodia. There are also several good local banks, and many of these offer excellent interest rates.
Banking in Cambodia offers a unique proposition: not only are US dollars in high demand, but the local Cambodian riel is essentially as good as the US dollar. The riel has hovered just above 4,000 to the dollar for the past decade, and we don’t see that changing much.
The biggest challenge you’ll have in Cambodia is bureaucracy; many banks want you to have at least a business visa and at worst a local referrer to open an account. Our colleague Reid at InvestAsian has been working on a streamlined process for opening bank accounts.
Canadian-owned ABA Bank is currently paying a rather generous 5.5% on one-year US dollar deposits. Switch that deposit to Cambodian riel and you’ll earn 7.5%. That’s not a huge premium but might be worth it given the low volatility.
Microfinance institutions will often pay even more; Korean-owned Woori Bank was paying 7.75% on US dollars last we checked. If you can find a good microfinance institution with good ownership, you can create excellent risk arbitrage, although you’ll need to be on the lookout for teaser rates like these.
Turkey – The World’s Highest Interest Rates
Banking in Turkey used to be a lot easier; back in the early 2010s, you could simply walk into a bank branch and open an account. Today, the process is made complicated by the requirement for a Turkish tax ID number, a requirement that our Turkish contacts tell us every bank follows diligently. Add that to the ongoing free fall of the Turkish lira and geopolitical risk, and you may be turned off by the idea of banking in Turkey.
However, this article is about high interest rates and Turkey certainly offers those, even as President Erdogan implores Turks to have faith in the local currency.
One of the best ways to earn high interest in the Turkish lira is with a (oddly-numbered) 92-day term deposit. Turkey has plenty of banks, but we have a soft spot for Garanti, which is offering anywhere from 25.5% to 28% depending on how much you deposit. If you think the lira has hit rock bottom, you can enjoy double-digit rates while waiting for it to appreciate, although analysts don’t see that happening in the near term.
Separate from high returns, one thing that is interesting about some Turkish banks is the ability to hold gold and a variety of hard-to-get currencies. Garanti, for example, offers time deposits in dollars, euros, British pounds, Swiss francs, and Japanese yen. Rates won’t be good, but you can access these currencies with nominal deposits that are often available only to priority banking customers in other countries.
For years, offshore websites have been exalting the virtues of banking in Mongolia. We made a video about the process of opening a bank account in Mongolia.
Truth is, it was somewhat painful and frustrating. For one thing, almost nobody spoke much English in Mongolia outside of the Shangri-la Hotel. Most bankers didn’t understand why a foreigner would visit Mongolia to open a bank account.
The two best banks in our opinion – Golomt Bank and Khan Bank – do open accounts for foreigners. If you deposit in Mongolian tugriks you’ll earn 11.2% with Khan Bank and 12.4% with Golomt Bank.
And there’s the rub. Mongolia is an interesting but rather confusing place. It’s not particularly easy or cheap to get to, nor is it very exciting. Few people speak English, and some experts aren’t exactly enthusiastic about its banks. Mongolia, however, is interesting as an exotic option.
The Uzbeki som – the somewhat obscure national currency of Uzbekistan – has been steadily losing value against the US dollar. Some years back it suffered a one-day loss of half of its value. Likely not the place you want to open a term deposit.
Despite its flawed currency, Uzbekistan’s banks do offer one bit of reassurance in that no bank has been liquidated with unsettled liabilities since the country gained independence in 1991.
Few of Uzbekistan’s twenty-six banks have entered the digital world with working websites that display interest rates, let alone offer competent online banking services. Then again, Central Asia is among the world’s final frontiers, and barely half of its citizens are digitally connected.
If exotic post-Soviet currencies are a risk you’re willing to take, Asaka Bank – one of the better digital banks – will pay you 16% for a one-year deposit in the Uzbeki som. Other banks pay equivalent rates; Trustbank at 16%, Asia Alliance at 16%, and Ravnaq Bank,14%.
So there you have it. Attractive deposit interest rates in some of these destinations must be offset by the practical challenges of banking there. Others do offer lower risk options, with convenient, and relatively hassle-free offshore banking.
Do you need help exploring your offshore banking options? To find out how we can help, reach out here.