6 savings accounts that beat stocks


I like this.


In these countries, a simple bank account can earn you upwards of 10 percent interest — way better than US accounts and, most years, even the market. But watch out for inflation and other risks.

By Jonnelle Marte, MarketWatch

With 15 percent interest, who needs the stock market?

Savings account yields in other countries can trounce those in the U.S., but savers abroad aren’t necessarily better off.

Interest rates are so low on American savings accounts that putting money in the bank seems only slightly smarter than putting it under a mattress.

With the average savings account yielding 0.08 percent and the typical one-year certificate of deposit paying 0.24 percent, according to Bankrate.com, the old-fashioned approach holds little appeal. But in other countries, rates are as much as 100 times higher than in the U.S. — returns that would thrill stock market investors.

Unfortunately, such rates are made possible in part by skyrocketing inflation, financial instability, central bank actions and currency fluctuations. And many of these yields are off limits to Americans, since some banks will only make accounts available to residents or people doing business in those countries.

Savers have to look at the “whole picture,” says Greg McBride, senior financial analyst for Bankrate.com. “Earning 10 percent when inflation is 9 percent is no better than earning 2 percent when inflation is 1 percent.”

Here is a look at the top saving rates from around the world.


As MarketWatch columnist Chuck Jaffe noted in a recent article on stock investing, retirement savers in Ukraine probably don’t need to risk investing in the stock market: They can get returns ranging from 8 to 15 percent in savings accounts insured by the government, according to Deposits.org, which compares international savings rates.

At Ukrsofstbank, for example, savers can earn an annual percentage yield of 17.5 percent if they lock up their money for three months. And they can earn as much as 18 percent for a one-year term deposit (similar to a one-year CD). Inflation, meanwhile, averaged a low 0.6 percent last year, according to the Central Intelligence Agency.


The 2.75 million residents of this Asian country can access a one-year term deposit account at Khan Bank that pays 15.1 percent, a jackpot compared with returns in much of the world. But the majority of that yield will get eaten by inflation, which was an estimated 14 percent last year, according to the CIA. Savers who pull money out before the one-year minimum time requirement could also face a 4 percent penalty.


Bangladesh’s economy ranks 44th in the world, according to Deposits.org, but its saving rates are among the top 10 globally. A one-year term deposit from HSBC Bangladesh pays 12 percent annually.

That may look attractive to some, even after taking into account an estimated 9 percent increase in consumer prices last year. However, savers need to commit a minimum 100,000 Bangladeshi taka to the account, the equivalent of roughly $1,300, and rates may get as low as 7.5 percent for retail customers.


Orient Commercial Joint Stock Bank, a bank in Vietnam jointly owned by BNP Paribas, offers a one-year term deposit account that has a 10 percent annual percentage yield. The bank cautions that deposit rates are “highly influenced by the central bank of Vietnam.” The 10 percent yield would be paid at the end of the 12-month waiting period, and could leave savers with a real return of less than 1 percent after a 9 percent annual inflation rate.


Komercjalna Banka in Serbia also pays a 10 percent annual yield for a one-year term deposit, but Serbian savers may reap bigger benefits out of the payout since inflation there is slightly lower than in Vietnam, coming in at an estimated 7 percent last year, according to CIA.gov. There is a minimum account balance of 5,000 Serbian dinars required (roughly $60).


Argentineans can earn a whopping 22% annually on their savings through a one-year term deposit account with ICBC Argentina, according to Deposits.org. That is more than 90 times the average CD rate in the U.S.

But American savers may be faring better after inflation. Consumer prices rose by an estimated 25% in 2012 in Argentina, according to data compiled by the Central Intelligence Agency, leaving those savers with an annual loss of 3%. In the U.S., where prices are growing by about 2% annually, a consumer in a one-year CD paying the national average yield would have a loss of roughly 1.8%.


Tags: , , , , , , , , , , , , ,

Post a Comment

Your email is never published nor shared. Required fields are marked *


Subscribe without commenting