Bank Robbery Offshore

Poor AUD Interest Rates for Expat Australians

Offshore Term Deposits - A poor deal for Australian expats and offshore investors

Australian banks consistently offer poor value to Australian expatriates and foreign investors wanting to place cash in Australian dollar term deposits and at call accounts.  The rates in the Australian domestic market continue to provide much better returns on your money, evening having regard to the 10% withholding tax that non-residents will pay on interest income generated in Australia.

The table below compares interest rates available from ANZ Singapore and NAB Singapore with the interest rates available from those banks in the Australian market as at November 5, 2013 for a AUD100,000 term deposit for 6 months.
 

Term Deposit : AUD100,000 for 6 months

Bank
Interest Rate (%p.a)
ANZ Australia
3.35%
ANZ Singapore
1.3324%
NAB Australia
3.35%
NAB Singapore
1.88%

Australian banks and their international compatriots still appear to pay 1.2% to 1.7% lower interest rates to non-residents, than to domestic clients. That is a very large and unjustifiable margin.

The moral of the story is unless you have very good reasons you should consider placing any AUD funds in an Australian account, where you will have the benefit of a much more competitive and flexible marketplace.  Seek advice from your financial advisor about the merits of investing directly in Australia versus offshore, or contact our sister site, Exfin.com, for access to advice.