Economist explains when a foreign deposit is more profitable than a Russian one

Who a foreign deposit is suitable for

A foreign deposit can be useful for those planning a long stay in another country or regular expenses in foreign currency — for example, paying for education, rent, or medical services abroad. This was stated to Gazeta.Ru by Doctor of Economics, professor at the Financial University under the Government of the Russian Federation Yuri Shchedko. According to him, in such cases what matters is not only the interest income but also the ability to use the money in the country where it is needed.

The rate is not the main criterion

The expert emphasized that comparing a foreign deposit with a Russian one solely by the rate is wrong: it is more correct to compare net income after taxes, fees, and conversion. He gave an example: a deposit of 1 million rubles at 14% yields 140 thousand rubles in interest per year before possible tax, whereas an equivalent amount at 4.25% in dollars brings in about $472 before taxes and expenses at a purchase rate of 90 rubles per dollar. The final result in rubles, Shchedko noted, will depend on the future exchange rate and the cost of transfers.

What to pay attention to before opening an account

Before opening an account, Shchedko advised checking the requirements for non-residents, deposit insurance, the possibility of remote deposits and withdrawals, as well as preparing documents on the source of funds and clarifying the availability of international transfers. Tax status also matters: according to clarifications from the Federal Tax Service, interest on foreign deposits of Russian tax residents is taxed without the tax-free minimum that applies to Russian banks. At the same time, according to the expert, placing money abroad does not guarantee protection from restrictions — the risks of inspections, payment delays, and blocked transactions remain.