Mongolia bank interest rate is a topic of discussion in a lot of offshore and internationalization circles. That’s because, for the last decade, Mongolian banks have been offering attractive interest rates for MNT, USD, and a few other foreign currencies.
In this article, we’ll explore banking in Mongolia, Mongolia bank interest rates, and whether opening an account here is worth considering.
We’ll also take a look at how opening a bank account in Mongolia stacks up against alternative Asian bank options, such as opening a bank account in Hong Kong, Singapore, and Taiwan.
Alternatively, if you’re looking for remote account opening in Asia, you might consider opening a Chinese bank account online.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Banking in Mongolia 101
- How to Open Accounts in Mongolia?
- What Interest Rates Can You Expect in Mongolia?
- What Are the Risks of Banking in Mongolia?
- Where Can You Consider Opening Accounts Instead?
- Do You Want Help Opening Bank Accounts?
Banking in Mongolia 101
First of all, Mongolia is not a banking jurisdiction. Instead, it’s more like a natural resources supermarket.
And, thanks to all the potential wealth from its vast unmined natural resources, the country has received a bewildering amount of inbound foreign investment over the last decade.
This has resulted in a rapid expansion of most industries, including banking and financial services.
At present, there are 16 banks operating in the country (one is even owned by an ex-sumo wrestler)… but only three or four of them should be considered when opening accounts.
In general, the Mongolian banks worth considering are those partially owned by major foreign investors, foreign development funds, and other international banks.
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How to Open Accounts in Mongolia?
Mongolian Banks don’t restrict foreigners or non-residents from opening accounts.
In fact, thanks to the influx of foreign capital, most of the major banks have staff that are dedicated to supporting foreign customers.
Certain banks even have dedicated branches in Ulaanbaatar (Mongolia’s capital city) to assist with account opening.
That said, the account opening process can be challenging if you want to open from abroad. In most cases, you will need to hire a local lawyer to act as your power of attorney to open the account on your behalf.
Alternatively, if you’re planning a trip to Ulaanbaatar, you can visit a branch of the major bank with your relevant documents and apply for an account directly.
What Interest Rate Can You Expect in Mongolia?
Between 2010 and 2020, banks in Mongolia offered interest rates between 10% and 13.5% on MNT deposits.
While this is an incredible deposit rate when compared to other markets and currencies, it’s important to remember that during this time the country experienced very high inflation of between 5% and 9%. And like elsewhere in the world, official inflation numbers have since increased, now sitting closer to 14%.
That said, from mid-2020 until late 2022 there was a steady decline in deposit interest rates, dropping to single digits and eventually resting below 6%.
However, at present, it’s again possible to lock in double-digit interest rates in certain instances. Here is an example of the available rates on different currencies for a 12-month fixed-rate deposit:
- MNT: 12.4%
- USD: 2.0%
- RMB: 1.7%
- JPY: 1.8%
As always, if you plan to deposit larger amounts, you can expect more flexibility and higher rates. So, make sure to negotiate your deposit rate before committing to opening an account.
What Are the Risks of Banking in Mongolia?
If you’re looking to open a bank account in Mongolia, it’s important to consider that there is currently a foreign currency crunch in the country.
This foreign currency crunch has resulted in banks limiting foreign currency withdrawals by their customers. At the time of writing, customers are unable to withdraw more than $300 USD from their account each day. Note: This applies to withdrawals in USD, not the MNT.
There are other risks to banking here as well, though they obviously depend on the specific bank you’re opening with, the currencies, you hold, and the process you use to open accounts. For these reasons, we typically suggest that foreign non-residents only consider opening accounts with a select number of banks.
Where Can You Consider Opening Instead?
If you’re looking to open interest-bearing accounts with attractive rates, you may want to consider jurisdictions with a more stable banking sector and a more stable currency.
For example, we previously shared that Panama (a USD-based economy) has options for foreign non-residents to open 100% remotely. And, banks here tend to offer deposit rates that are at least double (sometimes higher) than what is on offer in the United States and elsewhere.
That said, Panama is not the only jurisdiction to consider. And depending on your home currency, there might be better options for you to consider elsewhere.
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