If I buy a CD in a bank in a country that pays higher interest is this a good way to earn income?

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Good question!

First, when you purchase a bank CD you are accepting some of the lowest rates of return.

Second, the idea of transferring your money denominated in one currency into another currency and then placing it into a bank CD in the foreign bank won’t necessarily work out any better even if the interest rate is higher (if the exchange rate works against you).

Third, if you place the money in higher paying USD denominated accounts in foreign countries that pay in USD you still are accepting some additional risks there and some transactional costs.

The fundamental problem with all of this is thinking that a low return bank certificate of deposit in country X is not much better than a low return bank certificate of deposit in country Y even if on paper it looks like a higher return.

If you want to learn how to invest, I suggest contacting my office for mentoring where we cover the basics of why a strategy like this in application normally will not produce good results.

I hope that helps and good luck with your investing!

Benjamin Z Miller
www.benjaminzmiller.com