<prompt> Human: FX trader here. I see a lot of Americans complaining about 0 interest rates. While other countries may offer higher interest rates on paper, you must also consider differences in exchange rates and in inflation.As pointed out here one New Zealand bank offers 4.3 interest.While this sounds amazing compared to the 0 earned in a US bank account, the rule of thumb, is that there is no free lunch. To keep it short: In a perfect world, inflation and exchange rate fluctuation would keep the real interest earned on US and NZD the same. When comparing two countries, covered interest rate parity says that the currency with the higher interest rate will depreciate by the difference in rates. If the NZD interest rate is 4 higher than the US rate, this says that the NZD is expected to depreciated by 4 over the course of the next year. In reality, fluctuations are much wider, but if you looked over the past year, changes in exchange rates have VASTLY benefitted the American over the New Zealander. While the US interest rate has been low for many years, the US has appreciated considerably vs other currencies to compensate for this. Heres an example: On May 2014, an American moved 100 to New Zealand to take advantage of higher interest rates.May-2014 exchange rate: 0.86 USDNZDMay-2015 Exchange rate: 0.72 USDNZDThese are the amounts of US Dollars that 1 NZ Dollar would buy. 1. American investor changes 100US to NZD in May 2014. He recieves 116NZD. 1000.86 1162. The investor happily recieves 4.3 interest over the course of the year in the New Zealand bank and in May-2015 he has 121NZD. 1161.043 1213. The investor converts his money back to US to buy his friends ice cream with the earnings. Unfortunately he only recieves 87US 1210.72 874. The investor would have ultimately been better off keeping his money in US, earning 0 100x1.0017 100 100 vs 87.Differences in inflation rates between the two countries will also play a factor. It is not as big of a deal in this case since New Zealand and United States are stable countries with about 2 inflation depending on who you ask.tl:dr no free lunch in other countrys interest rates. Look for investment income from equities or bonds if you are interested in that sort of thing. EDIT: Others are pointing out that slippage, taxes and transactions cost would be enough reason not to do this anyway. The point is that 10 interest rates overseas in Utopia-land is not what it seems. I would say, as a little guy, do not convert money to another country unless you are movingtravellinghave some personal reason for doing so. Do not spend your time worrying about changes in exchange rates, as it is akin to trying to predict topsbottoms in the stock market.  <response>: You dont know what you are talking about. If you would have always held your money in the best yielding first world country and made a switch once a year if some other country had taken the lead, then you would have made loads of money. Not only from the interest but also because those currencies tend to appreciate against others. This is a a true and tested strategy, you can do the backtest yourself if you dont believe it. Third world countries should be excluded from the strategy since they have high inflation at least historically and political instability which counters the earnings from the high interest rates. So, there does in fact appear to be a bit of a free lunch there but of course there is no guarantee that this will always be true. Also, leveraging yourself up the ass with a carry trade will end badly sooner or later, so dont do that. 