These Countries Offer the Highest Interest Rates Today

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Despite rising interest rates in the U.S., you won’t get rich by parking your money in a savings account. But in a country with extremely high interest rates, your cash could make a nice chunk of change just sitting in the bank. If you’re thinking about relocating, consider countries where you can earn substantial interest on savings accounts or other types of deposit accounts, but make sure to factor in how inflation affects interest rates.

Keep reading to find the countries with the highest interest rates on deposit accounts, see how inflation affects those interest rates and learn about real interest rates.

Interest Rates Today: The Highest Interest Rates in the World

Checking, savings, money market account and CD interest rates in the United States have improved but are still low. Consider that the national average interest rate for savings accounts is 0.39%, according to the Federal Deposit Insurance Corp.

You might be wondering if rates are better in other countries. The answer is yes — many do offer better rates on savings and other deposit accounts. But there are risks, including unstable governments and economies. Additionally, the FDIC only insures domestic deposits, and some countries have protection that is much less developed. With that in mind, here is a list of countries offering the highest deposit interest rates worldwide:

How Inflation Factors Into the High Interest Rates

When the price of goods and services rises over time, it’s called inflation. A certain amount is healthy, but high inflation rates are a sign of trouble. The problem occurs when consumers buy instead of save, which contributes to higher inflation and weakens the purchasing power of the dollar. 

To keep inflation in check and encourage saving, the Federal Reserve will raise interest rates on occasion. To understand the effects of a rate increase, assume, for a moment, that inflation has fallen to 3% but you can get 5% interest by placing your money in a savings or money market account. Under these conditions, you might choose to save instead of spend.

Your “real interest rate” is the interest rate minus the inflation rate. In this case, you would make 2% on your deposited money. Although you earn a 5% annual interest rate, the price of goods and services increases by 3% due to inflation, leaving you with 2%.

When looking at deposit interest rates, you also need to factor in inflation to understand how much money your deposit will really earn.

How Inflation Affects the Highest Interest Rates by Country

The true yield on an interest-bearing account must factor in the country’s inflation and currency. Here’s a look at the countries with the world’s highest interest rates on deposit accounts and the effects of inflation on those interest rates:

Top 10 Highest Real Interest Rates in the World

The real interest rate is the lending interest rate adjusted for inflation, as measured by an index called the gross domestic product deflator. The GDP deflator measures changes in prices. Here are the 10 countries with the highest real interest rates, according to the latest data from the World Bank:

In the United States, the real interest rate was -1.2% in 2021.

How the US Banking System Compares

Most countries have central banks responsible for controlling the currency, much like the United States does. They also have both well-established banks and banks that are smaller and newer, similar to U.S. credit unions and small, local banks.

Although some U.S. banks, especially online banks, offer high-yield savings accounts with an APY of 4% or more, the average national rate is just 0.39%. Low interest rates in the United States are an indicator of stability — the highest current interest rates in the world come from highly unstable countries.

In the United States, everything from your mortgage and car loan interest rates to your credit card interest rate is affected by the most basic of interest rates: the federal funds rate. If the federal funds rate rises, all other public and private rates will generally rise, too. This could mean the difference between your money earning interest against inflation in a savings account and your account effectively losing money.

Proceed at Your Own Risk

Before you roll the dice overseas with dreams of double-digit interest gains, know that the international insurance protection on your deposits is likely not as comprehensive as FDIC deposit insurance.

Although foreign central bank interest rates might be higher, American banks protect your money either through FDIC insurance up to a certain amount or, in the case of credit unions, National Credit Union Administration insurance. If you make a savings deposit at an FDIC-insured bank, your deposit is insured up to $250,000. If you bank at a credit union that is insured by the NCUA, your funds are insured up to at least $250,000.

Advice

As with all investments and bank accounts, especially in developing countries, it’s important to weigh the amount of risk you’re willing to take on versus the return that you can expect. Although it would be great to earn over 10.00% APY on a savings account, it’s comforting to know that money you keep in American banks is fully protected in the event that your financial institution crumbles.

Cynthia Measom, Cynthia Bowman, Daria Uhlig, Ruth Sarreal and Jason Larkins contributed to the reporting for this article.

Data was compiled on April 24, 2023, and is subject to change. 

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