Many Americans look to offset the destructive effect of inflation by obtaining the highest interest rates in the US that they can find.
In theory, using high-interest rates to offset inflation is a great idea. But in practice, it’s incredibly difficult to pull off. The reason that it’s so challenging is simple: high-interest rates don’t exist in the US anymore.
You see, governments in the US, Europe, and Canada can’t keep their economies growing without an unending stream of quantitative easing and extremely low-interest rates. To facilitate this, every so often, central banks are forced to make cheap money available to the masses.
This approach to economic “growth” is what’s killing your ability to earn high-interest rates in the US. And it’s why rates have dropped by more than 60% in the last 20 years.
Today, the highest interest rates in the US clock in at around 2% to 2.5%. Though to achieve such “high” rates, you typically need to commit to a five-year deposit. Even then, you won’t find these rates at any of the big box banks. You’ll have to open an account at a smaller bank or a credit union, which is often through a promotional offer for new customers.
In this article, we’ll discuss the highest interest rates in the US. We’ll provide a bit more detail on why interest rates are so low and what you can do about it.
At the end of the article, if you’re still hell-bent on receiving near-zero interest in the US, we’ll show you where to get the highest interest rates possible.
For everyone else, we’ll share some of the best places to access high interest rates on deposit accounts around the world. In these countries, interest rates are up to three times higher than those available in the US.
We’ll also demystify the account opening process and show you exactly how to start opening these accounts.
Why Are The Highest Interest Rates in the US so Bad?
This is a big question. To give you a complete answer, we’d have to dive into the details of the US financial system, US lending behavior, cheap credit, and US monetary policy.
But, since this article is about finding the highest interest rates in the US, we’ll cut to the chase…
US interest rates are so low (compared to other parts of the world) because the US Federal Reserve Bank (the Fed) lends money to US banks at incredibly low rates. The Fed does this because lending cheap money to banks allows the banks to lend cheap money to everyday customers. And then customers, with their borrowed cash, start spending and stimulate the economy.
In other words, if US banks can borrow money from the Fed at less than 1%, they can profitably lend money to US consumers at 3% or 4%.
This means that US banks can offer debt products like mortgages, car loans, and lines of credit to consumers at low rates.
In turn, consumers are more likely to take advantage of these low-interest rates by taking out mortgages, car loans, and lines of credit. And doing this allows them to spend more money. This is how the Fed helps stimulate the economy.
If the economy grows too fast and starts to “overheat”, the Fed increases rates, which has the opposite effect of what was just described above.
That’s the short version of a complex subject that we can discuss over a beer sometime. For now, let’s get back to capturing the highest interest rates possible…
What Are The Highest Interest Rates in the US?
To lock in the best interest rates in the US, you’re going to be looking for a Certificate of Deposit. CD for short. CD’s are a contract between you and the bank. You commit to depositing money for a fixed period of time and the bank commits to paying you interest over that time.
Typically, CDs start at a three-month commitment. But sometimes, they can range up to ten years. Naturally, the longer you commit to locking your money up, the higher the interest rate a bank is willing to pay.
The other major consideration is how much money you’re willing to deposit. Banks typically set minimum and maximum amounts that they’ll accept for specific CDs. Not surprisingly, higher interest rates usually require a larger deposit.
We’ve pulled together the available interest rates in the US, breaking down the lowest and highest available Annual Percentage Yield (or APY) for each category. That said, we haven’t included the minimum or maximum deposit requirements, though in most instances you should be able to access these rates with deposits starting at US $5,000.
Based on our research, here’s what our analysts think you should expect when depositing funds into a US CD right now…
| wdt_ID | Term | APY (Low) | APY (High) |
|---|---|---|---|
| 1 | 3 Months | 0.01% | 1.30% |
| 2 | 6 Months | 0.04% | 1.70% |
| 3 | 12 Months | 0.04% | 1.90% |
| 4 | 18 Months | 0.04% | 1.90% |
| 5 | 2 Year | 0.04% | 1.90% |
| 6 | 3 Year | 0.05% | 2.22% |
| 7 | 4 Year | 0.05% | 2.10% |
| 8 | 5 Year | 0.05% | 2.20% |
It’s pretty clear that the current rates on offer in the US are horribly low, but it becomes even clearer when you compare these rates to what’s available elsewhere.
Where Can You Get Higher Interest Rates?
Last week, we talked about the available interest rates in Panama. It’s a USD-based economy and a two-hour flight from Miami. Panama also has a stable economy, a strong democracy, and is home to one of the biggest ports in the world.
Here’s what the average rates in Panama look like when compared to the highest interest rates in the US that we just shared above…
| wdt_ID | Term | US APY (High) | Panama APY (Average) |
|---|---|---|---|
| 1 | 3 Months | 1.30% | 2.00% |
| 2 | 6 Months | 1.70% | 2.65% |
| 3 | 12 Months | 1.90% | 3.25% |
| 4 | 18 Months | 1.90% | 3.50% |
| 5 | 2 Year | 1.90% | 3.75% |
| 6 | 3 Year | 2.22% | 4.00% |
| 7 | 4 Year | 2.10% | 4.00% |
| 8 | 5 Year | 2.20% | 4.15% |
When you consider that the interest rates being offered are both on USD deposits, in banks that are located in USD economies, it’s hard to understand why anyone would choose a US CD over a Panama CD.
Especially when you start exploring interest rates in Panama further and realize that it’s possible to capture over 5%.
Now, we’re not trying to sell you on Panama. In fact, we’re not trying to sell you on anything. We’re simply highlighting that your options for interest rate products get better when you look abroad.
There are stable banking jurisdictions around the world where you can earn significantly higher interest rates than those available in the US. Panama is just one example.
If you want to explore what interest rates look like in other countries, you can get started by checking out the GlobalBanks Interest Rate Tracker for free right here.
You Still Want to Access the Highest Rates in the US?
If you’re still keen to access the highest interest rates in the US, that’s certainly something that GlobalBanks can help you with–even if you’re a non-resident foreigner.
Access this month’s most pressing high-interest rate information in our Interest Rates Alert. Get your copy for free when you insert your email below and subscribe to the GlobalBanks Newsletter!
We also recently published “US Banking – Comprehensive Guide for Non-Residents, Foreigners, & Businesses”. This is a special report that is available to our premium members, GlobalBanks Insiders.
It outlines the step-by-step process that anyone, from any country, can use to start tapping into the many benefits of banking in the US.
And while this article didn’t shine a very positive light on how to get the highest interest rates in the US, that doesn’t mean that all banking in the US is bad or subpar. In fact, US bank accounts are incredibly valuable and have a lot to offer.
In fact, GlobalBanks recommends the US for transactional banking and payment processing–it can be an excellent banking hub for foreign non-resident individuals and their businesses.
And if you’re an entrepreneur or a frequent traveler, the US credit card and their rewards programs, make opening US accounts a no-brainer.
Of course, accessing US credit cards as a foreigner is not an easy task.
Fortunately, our new report “US Credit Card Report: How Foreigners & Non-Residents Can Get US Credit Cards”, guides you through the entire process. It outlines specific strategies for every customer group, showing you exactly how to unlock the benefits of US credit cards–regardless of nationality or residence.
Access All the Benefits of Banking in the US Now
If you’re ready to take action and start opening US bank accounts now, you can get started with GlobalBanks USA, our dedicated US bank account opening service.
GlobalBanks USA gives you everything you need to start finding and opening US bank accounts for you or your business today.
When you join GlobalBanks USA, you receive a dedicated account manager to help you navigate your US account opening options.
Plus, you receive access to our library of premium (members only) US banking reports, including proven account opening strategies, client-specific lists of banks, and strategies to make the most of US banking.
Of course, you also receive direct introductions to US bankers who are ready to help you navigate the account opening process at top US banks.
To get started, click here to see if GlobalBanks USA is the right choice for you to start accessing the benefits of US banking today.
You can also view all of the account opening solutions offered by GlobalBanks on our products page.
