... and, starting next year in Germany, be taxed at a flat 25% rate, which will be a better deal than in the US or most other places where passive income is taxed at one's marginal income rate.
@Zimmer: Perhaps it's the mandatory withholding here that is confusing. It is clearly nicer to allow interest to compound and then pay the taxes in a lump sum later ... but once you're over a certain level of passive income, even the US compels one to pay estimated quarterly taxes ... and asess a pentalty if it's over a certain percentage of your total tax bill. Screw up enough and the IRS puts one on the hook for mandatory "back-up withholding", which is no fun at all.
N.b. I saw that Dresdner Bank now has a 5.1% CD-like product on offer.
Brazil has the highest interest rates: 13%. I wonder if non-residents are allowed to open a bank account... I mean, in Germany, interest earned from savings is taxable. WTF! I have already been taxed what 40% or so for my income which part goes into a savings and I'm taxed again for this savings??
Even if you parked your money somewhere else and earned (nominally, as has been pointed out previously) higher interest rates, you'd still be on the hook for local income taxes. Google
up how tons of japanese housewives poured into New Zealand savings accounts for the yield pickup, and then watched the bottom drop out. there's no free lunch.
One can legitimately whinge about income tax on dividends being a "double tax" because the company paying the dividend does so out of after-tax income on which it's already paid corporate tax (which is one of the philosophical reasons Germany has made their corporate income tax pretty darn competitive vs. the rest of the world; note also that since so few germans are direct shareholders, few would likely benefit from more tax-efficient sharebuyback programs vs. straight dividends), but there's nowhere to hide on passive interest income on personal savings, because that's viewed as income on simple deferred consumption (which will then be VAT-able ... but that's a whole 'nuther can of worms )