Panama Certificates of Deposit (CD) - International Relocation Firm

Panama Certificates of Deposit (CD)

IMPORTANT NOTICE TO US PERSONS: US Persons (US citizens or residents) must report their worldwide income including interest from bank accounts or time deposits.

Panama certificates of deposit (bank deposits, time deposits, or “CD’s”) are one of the most popular investments because they offer fixed, monthly income to the investor. Panama banks offer CD investment products.

How a Panama Certificate of Deposit Works

A certificate of deposit (CD) from a reputable Panama bank is the most secure investment available in Panama. An investor signs a deposit contract with the bank which provides the investor a fixed annual interest rate (normally the interest is paid on a monthly basis) in return for the use of a specified sum of the investors money for a specified time period. Once that time period expires (matures), the investor or depositor has the option to either renew the time deposit contract (CD), or take the money back.

Advantages of Panama Bank CD’s

1. Higher Interest Rates: Panama banks generally pay more competitive interest rates on time deposits because:

  • Panama banks lend at higher interest rates, and therefore can pay their depositors higher interest rates on deposits,
  •  Panama banks operate in low cost jurisdictions (employee salaries are lower), thus have lower operating costs, so they can pass these savings back to their depositors in the form of higher interest rates,
  • Panama banks are less regulated, thus have lower operating costs, so they can pass these savings back to their depositors in the form of higher interest rates.

2. Low Taxes: Panama banks are not required to with-hold any of the interest paid to the depositor, because the laws in Panama do not tax interest income from banks. IMPORTANT NOTE: US persons (citizens or residents) MUST report all bank accounts held in Panama, and Panamanian banks automatically report US person accounts to the US tax authorities.

3. Asset Protection: Panama banks offer strict banking secrecy laws, and corporate accounts are also available.

Please note that most Panama banks require minimum deposits from as low as US$10,000 to US$100,000 for CD investments, depending on the particular bank. CD rates vary so contact us to get updates. Quoted rates may change without notice, may vary depending on the LIBOR (London InterBank Offering Rate), and may be subject to minimum deposits and/or minimum balance requirements and/or certain terms for CD’s.


For investments in CD’s, we generally recommend banks in Panama for the following reasons:

  1. Panama banks pay the most competitive interest rates,
  2. Panama banks are the most stable, and offer the most security,
  3. Panama banks deal in USD (it is the circulating currency) and many also deal in EURO currency.

More About Panama Banking

Panama is home to one of the largest international trade zones in the world (Colon Free Trade Zone) and the Panama Canal.  Panama is the most popular jurisdiction in the world for ship or maritime vessel registrations and domicile.  Here, businesses from all over the world buy, sell and ship goods, and therefore these same companies constantly need letters of credit, loans, etc. from banks in Panama to manage their ongoing business transactions.  Therefore, banks in Panama receive a wide range of international clientele and charge them higher rates for loans, letters of credit, etc.

Panama’s banking infrastructure is one of the best in the world, being home to one of the largest banking centers in the world.  Panama has very high banking standards, and the banking regulations in Panama are very strict with high fines for banks that do not comply with regulatory requirements.

Panamanian banks do not carry FDIC (Federal Deposit Insurance Corporation) insurance as banks in the United States do.

The Superintendency of Banks of Panama monitors each bank’s credit policies to ensure that no irregularities exist, and that depositors funds are not being misappropriated.  Each bank has government appointed compliance officers that monitor the banks activities on a daily basis.  In addition, some banks maintain a private insurance policy, through large international insurance companies, protecting against fraud, theft, etc.

Strict privacy laws protect banking in Panama, and there are no Panama taxes on interest income, making it very popular with those looking for a secure, well legislated  jurisdiction for banking.  Panama has strict privacy laws that govern the disclosure of Panama’s banking information.  This makes banking in Panama popular with those seeking a greater degree of personal security and privacy.  Panama also adheres to very strict international anti-money laundering rules and regulation.


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