Can I make money from taking out a loan from a country with a low interest rate (such as Switzerland, that has an interest rate for loans from 4.9%) and put it into a fixed savings deposit account in a country with a high interest rate (the Ukraine, for example, where the interest rate has been said to be around 20%).

What would be all the possible drawbacks. This case of making money of a loan with a savings account(mentioned above) seems to be to black and white(obvious).

I know Ukraine is an unstable country and there is a higher risk of course of losing my money. but apart from that, what else should one look out for?


1 Answer 1


The country with the high interest rate deposit accounts:

  1. might every well have restrictions on taking that money out of the country. Otherwise, everyone in the world would be doing what you suggested and the Ukraine would go broke within weeks, and

  2. has a very good reason for offering those high rate deposit accounts; currency instability is one that leaps instantly to mind (where any money you make on interest rate arbitrage is lost due to falling currency exchange rates).

  3. Currency exchange fees (both ways) would also bite into any profit.

  • Is the interest rate difference between the SAR and UAH big enough to be worthwhile, or would you have to convert SAR to CHF and then CHF to UAH (where currency instability would still bite you)?
    – RonJohn
    Commented Jun 16, 2019 at 21:11
  • Also there might be taxes on interest income
    – xyious
    Commented Jun 17, 2019 at 18:10

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