Hi I’m an Aussie, I was just wondering if it is possible to open a high interest account overseas and if its a good idea? For example, if South Africa has an interest rate of 11% could I open an account there and get around 11% return on the money in the account/term deposit?
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Yea, I agree with Thor. Protection of that money is key.
The large South African banks are very stable as South Africa has in the last few years introduced very strict credit control legislation preventing banks from reckless lending, so you can more or less be ensured tat you will get your money back.
The one problem is that for some or other reason the collapse in America and Britain has caused to South African currency to devalue, so if you invest money and the currency keeps devaluing you will be loosing money. But, on the other hand it is very low at the moment and will most likely increase in value again in which case you will make additional money.
Remember that reward is a function of risk.
You would also be adding currency risk. They might pay 11% but what is their inflation rate?
What kind of insurance do you have that you will get your money back and the bank won’t fail?
What taxes would SA charge on your money and what would your country charge you as an ongoing tax or if you repatriated it back?
It can be done but there is a lot to consider.