Bank Robbery Offshore

Poor AUD Interest Rates for Expat Australians

Offshore Term Deposits - A (continuing) 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.

As an example, consider the table below which compares the interest rates available in July, 2017 on a term deposit of AUD50,000.

Interest Rates : AUD50,000 on deposit for 12 months
Interest paid annually : July 19, 2017
Domestic Rates vs. Asian Rates

ANZ
2.30%
Westpac
2.35%
Commonwealth Bank
2.35%
NAB
2.40%
 
 
ANZ Singapore
0.1814%

Australian banks still appear to pay interest rates to non-residents up to 2% lower than those available to domestic clients. That is a very large and unjustifiable margin, but ANZ Singapore cant be our future point of comparison - it was sold to DBS (Singapore) in August 2017. It continues to be the case that we do notrecommend any Australian bank to Australian expatriates because of a lack of reach, service and experience.

However, the moral of the story remains the same - 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.