Top saving rates for expats in 2021

This article will discuss two questions:

  • What are the top saving rates for expats in 2021 around the world – including in some emerging markets?
  • What are some of the best rates available in developed markets?

It remains our view that investing money, rather than saving, makes sense in a world dominated by 0% interest rates and currency risks.

If you want to invest, don’t hesitate to contact me, email (advice@adamfayed.com) or use the WhatsApp function below.

Introduction

Deposits are an alternative to keeping money under your thrift-box or under the pillow. Getting rich by this way is unlikely to succeed, but savings will definitely not be eaten by volatile exchange rates or inflation. 

According to forecasts, in the next three years it will be about 4%, and the rates on deposits are now in the region of 6-7% (as a rule, the highest interest can be obtained by investing a large sum at once). That is, you can still make money. In addition, the deposit is a liquid asset: if you need money, you can take it (but you can lose part of the accumulated interest). But if you invest in real estate, the money back will take much longer.

Anyways let’s now learn what are the deposits and what purposes they can have? They differ depending on their task, currency and timing of placement. Time deposits are placed for a predetermined period (usually from one month to five years). The highest interest is charged on such deposits, but there are restrictions: for example, most often you cannot withdraw money until the expiration of the agreement, otherwise the bank will reduce the interest.

More flexible demand deposits: you can withdraw savings at any time, but the rate on such a deposit is minimal – on average from 0.01 to 0.1%. Also, deposits are divided into replenished and not: you can put money on the first at any time – this is profitable, because the larger the amount of the deposit, the higher its profitability.

Moreover, there are deposits for solving specific problems: you can save up for a child’s education or the first installment on a mortgage, invest in mutual funds and even help children with serious illnesses – in this case, the bank will transfer a certain percentage of the amount of the contribution to the charitable fund.

And in addition to deposits, many banks offer their clients savings and savings accounts. This tool is suitable for short-term investments: as a rule, you can replenish such accounts and withdraw money whenever you want, and at the same time, they are more profitable than demand deposits.

Top 5 Emerging Countries with Highest Bank Interest Rates in 2021

If you are tired of the stability of offshore bank accounts and want to risk finding a bank with one of the highest interest rates in the world, take a look at this rating.

In a number of countries, interest rates can be as high as 20%. Of course, there is a fly in the ointment in every barrel of honey: in exchange for such tempting interest, you will receive constant fears about banking stability, the exchange rate and even the possibility of theft of your funds.

Developing countries sometimes give very tempting offers for making good profits, but it is worth soberly assessing all the risks in advance and deciding whether the game is worth it?

5th place – Turkey

Turkish banks pay some of the highest rates in the world to attract investments in the local currency (Turkish lira), which is going through hard times. The concern is that the flow of foreign investment in Turkey may soon dry up, and then the country will have no choice but to devalue the lira. This has happened before.

Therefore, deposits in Turkish banks are akin to a casino: you can lose, or you can win. You can earn 10% on online savings accounts denominated in Turkish Lira or 8-9% on regular deposits.

Turkey’s advantage is the large international banks, and the main disadvantage is the risk of devaluation of the Turkish lira.

4th place – Uganda

Uganda is one of the smallest countries in sub-Saharan Africa. Most likely, you have heard almost nothing about this country and have no idea what the national currency is, but it is it (the Ugandan shilling) that can help you earn 12% per year.

Offers such conditions, for example, Bank of Baroda. In fact, it is the state bank of India, with branches even in New Zealand. This bank also opens dollar accounts but then pays 2.5% per year.

The main attractive feature of Uganda is the ability to open multicurrency accounts, including those in US dollars. And the same instability and high level of corruption can be called a negative feature.

3rd place – Bangladesh

Bangladesh is a small country that was once a breakaway part of India. Today it is one of the most densely populated countries in the world. The general public remembered Bangladesh last year, when more than 1,000 textile workers died due to non-compliance with safety regulations. Today, workers continue to work in factories like this and believe they are lucky if they make $ 125 a month.

Banks in Bangladesh are trying in every possible way to attract capital in local currency (Bangladeshi taka), and therefore offer a rate of up to 12% per year. Local banks allow you to open an account with less than $ 1000.

Large international banks are also present here, but the currency is not stable enough.

2nd place – Mongolia

For a while Mongolia was the place where investors and their capital were very well treated. Just a couple of years ago, Mongolia showed the largest GDP growth in the world – up to 20%. New mineral deposits have been found that could potentially make the country one of the richest in the region, thanks to the supply of resources to neighboring China and Russia.

These plans were somewhat shaken due to political populism and lack of resources. The local currency, the Mongolian tugrik, lost 50% of its value last year. The number of foreign investments has also decreased by half.

But now depositors can earn up to 16.1% per annum in Mongolian banks. Even a thirty-day deposit can bring up to 8%, and this despite the fact that you only need $ 11 to open an account.

Unexpectedly, Mongolian banks are quite stable, with a decent level of liquidity. The main drawback is the high probability of currency devaluation. However, Mongolian banks offer the opportunity to open a dollar deposit at a rate of 6-7% per annum or a deposit in yuan, on terms of 3% per annum.

1st place – Ukraine

If nothing bothers you in this country, you could benefit from here one of the highest interest rates on bank deposits in the world. A deposit for three months will bring you 20%, for one – 17%. Europe certainly cannot compare with this.

There are two small problems. First, Ukrainian banks are often used for money laundering. If the bank is bought by someone from the criminal circles, you can forget about your money.

The second problem is the rapid drop in the exchange rate of the local currency, the hryvnia. Over the past year and a half, the hryvnia has depreciated against the dollar by almost three times – from 8 hryvnia to 21, and at one of the peaks in 2015, the dollar was worth more than 30 hryvnia.

The main disadvantages of the option with Ukraine are the instability of the banking system, currency, lack of security and a stable political system. However, there is also a nice bonus – the opportunity to tell everyone that you have lost money in Ukraine.

What about Swiss banks?

You probably were waiting for some Swiss banks to be listed here, and yes, Switzerland is still one of the countries that has a leading position in banking, and offering its clients one of the best interest rates. 

What determines the interest on deposits in Swiss banks?

The amount of interest is the result of the policy of this or that bank, which, being an independent player in the civil turnover, itself determines with whom and on what conditions to enter into contractual relations. Since credit institutions in the overwhelming majority of cases are the strength of the relationship, it is their rules that ultimately become the terms of the agreement.

At the same time, in their policy, credit institutions are guided by the behavior of other banks and, above all, by the refinancing rate of the Swiss National Bank. Although this factor does not eliminate the difference in interest rates offered by banks, it puts it in the “corridor” of minimum and maximum values.

The general rule is the following: the lower the rate of refinancing of the foreign exchange regulator, the lower the interest on deposits. In other words, with a declining refinancing rate, it is much easier for a bank to borrow money from the National Bank than from depositors in the market. Accordingly, the latter are forced to put up with worse conditions when placing money in the account.

In addition to the fact that different banks have their own policies, interest rates on deposits in Swiss banks vary within the same credit institution, depending on the client’s status (deposit amount, place of residence). In the latter case, it is important for banks whether the client is a Swiss resident or not. 

Are there other interest rate options for expats?

Let’s also consider other international banks that can be good for both citizens and expats by reviewing banks.

Barclays Bank

Barclays, a historic London bank, is a transatlantic financial services conglomerate serving clients in 40 countries. In the United States, its retail banking operations are fully digital and focused exclusively on depositors. The bank also issues dozens of joint credit cards with airlines, hotels and other partners. Wondering if Barclays has anything for you? This short introduction can help you make a decision. 

Barclays online savings account

This is a high yield savings account. Here are the main features:

  • Competitive annual interest rate of 0.40% on all balances as of 12 January 2021
  • No commission for minimum balance or monthly maintenance fee
  • No minimum deposit required to open
  • Add money via direct deposit, mobile check, transfer via ACH or by mailing a paper check

The APY of this account makes it one of the best high yield savings accounts. The lack of minimum balance or deposit requirements also makes it a competitive proposition, especially if you’re just starting to save and don’t have a lot of money to deposit.

Since this is a savings account, federal regulations limit you to six withdrawals or transfers per month. If you are over six, you will be charged a $ 5 fee for each additional transaction.

The main disadvantage is access. You will not have an ATM or debit card with this account. Barclays restricts your withdrawals to ACH transfers to a linked external bank account or by paper check. However, if you need to add money, you have more options. 

Ally Bank

Ally Bank is an online bank offering competitive escrow accounts and other financial services. Ally’s roots go back to 1919, when it started out as GMAC, the financial arm of the automaker GM. In 2009, the bank was renamed Ally Bank, a straight-forward online bank.

Ally Bank should appeal to most consumers looking for a reliable online bank account. This can be especially good for clients who want to:

  • Get a competitive income from savings
  • Open a savings account without a minimum balance requirement
  • Open a checking account with a debit card and no monthly maintenance fee.
  • Earn More On Your Cash With CDs That Require No Minimum Deposit
  • Bank with a well-known, well-known online bank

Ally online savings account

Ally’s online savings account provides a relatively high APY on deposits. (APY reflects a compound interest rate based on the frequency of compounding.) It has the following features:

  • As of December 23, 2020, earn 0.50% per annum regardless of your account balance.
  • No minimum initial deposit or permanent minimum balance required.
  • Fund your account by transferring money from another account, sending checks for deposit, transferring funds or making a mobile check deposit.
  • There are no monthly fees.

To withdraw your savings, you can transfer funds to another Ally Bank account or a linked account from another bank. You can also request a check or outgoing transfer. An online savings account does not include an ATM, but you can open a money market account or interest check if you want to have easier access to your cash.

Live Oak Bank Review

Live Oak Bank is a relatively new online bank with attractive savings rates. Founded in 2008, the bank initially focused on lending to veterinary clinics and continues to be primarily a lender to small businesses, albeit to a wider range of industries, and offers savings products to both consumers and small businesses. 

Live Oak Bank offers many small business resources as well as competitive consumer deposit rates. Unlike some of the largest online banks, Live Oak does not provide an account to spend funds, but it does look friendly and modern without going out of its way to show you how trendy it is. A bank in Wilmington, North Carolina may be the right place for you if you:

  • Want to earn at a competitive rate with an online savings account
  • How To Build A CD Ladder With Above Average Ratings
  • Already have a main checking account
  • Want to avoid maintenance fees in your business savings account
  • Need help financing your business
  • No need to access regular banking services

Live Oak Bank online savings account

Live Oak’s high yield online savings account is a simple account with a competitive interest rate that outperforms well-known players such as Ally Bank and Capital One 360. Of course, Live Oak does not have a checking account as part of its banking package, but APY in a savings account can compensate for this. Here’s an overview:

  • 0.60% per year
  • No minimum deposit required
  • No monthly service fees
  • Mobile check deposit
  • You can link to external banks, deposit paper checks, or transfer money to fund your account.
  • You can access funds via wire transfers to an external bank
  • Available online only

Two things to be aware: Because this is a savings account, federal regulations limit you to six withdrawals per month. If you exceed six, you will be charged a $ 10 fee for each additional transaction. In addition, if you have $ 10 or less in your balance and do not perform any activity for 24 months in a row, Live Oak will charge a dormant account fee of up to $ 10 and close your account. You can fulfill the “activity” requirement by logging into your account, depositing money or withdrawing funds. 

Chime Bank

Chime only provides online expense and savings accounts. The company was launched in 2014 as an alternative to traditional banks. Chime does not have its own branches or ATMs. As of February 2020, Chime reported that it has 8 million accounts.

Chime should appeal to consumers looking for a simple, no-fuss escrow account with minimal fees and mobile-friendly features. It might suit you if you want:

  • Get access to direct deposit funds earlier
  • Open a savings account without a minimum balance requirement
  • Open a current account with a debit card and no overdraft fees
  • Send money instantly to Chime account holders with no additional fees
  • You have bad banking history but want to open an account

Chime savings account

Chime offers a low income savings account option that is linked to your expense account and provides two automatic savings options.

To get started, you can activate the Save on Spending tool, which rounds purchases to the nearest dollar and transfers the additional amount to your savings account. For example, Chime rounds up a $ 10.62 purchase to $ 11 and then transfers 38 cents to your savings account. These small amounts add up, especially if you make many transactions throughout the month.

According to Chime’s internal data, members using the Save On Expense feature save an average of $ 217 per month, which is $ 104 more than members not using the feature3.

Only those with Chime Spending accounts can open a Chime Savings Account.

In addition, Chime’s Save When I Get Paid feature automatically saves a pre-set percentage of your direct deposit and transfers the amount to your savings account. Automatic savings takes the burden off you and helps you build up your savings effortlessly.

Otherwise, the only way to fund your account is to transfer money from your spending account.

Unfortunately, Chime does not offer the best Annual Percentage Yield (APY) compared to the most popular high-interest savings accounts but anyways it can be also considered as a potential banking system. (According to its website, it was 0.50% as of December 11, 2020.) You could get more interest with some other high yield online banking savings accounts. Depositing cash is also a bit onerous – you will need to visit a Green Dot point and possibly pay an extra fee to a third-party money transfer service. 

If you have money in your checking account every month – or you can adjust your budget this way – you should have a high-rate savings account. (Again, think about 0.50-0.60%.) It is always good to save money for emergencies, and it will net you a lot more in an account that pays off one of the best savings accounts than it does in a checking account.

Just make sure you have enough funds in your savings account to avoid monthly payments. Most online savings accounts do not charge them, unlike many traditional accounts.

Above mentioned banks may seem to offer low interest rates, but they are the best ones among millions of banks around the world. Residents can easily open and save money every year due to these banks, which offer the most competitive rates. 

This article can be a good guide for people who are expats in a new country and who look forward to find a good bank option to start cooperating with, so listed ones can help you orientate and easily make a useful decision. 

Pained by financial indecision? Want to invest with Adam?

Financial Planner - Adam Fayed

Adam is an internationally recognised author on financial matters, with over 225 million answers views on Quora.com and a widely sold book on Amazon.

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