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Time Deposits in Panama

Posted by regionpanamarealty on October 25, 2019


What is a TD/CD?

Time Deposits in Panama (TD/CD) are lower risk investment methods that provide a specific interest rate in return for depositing capital into a bank for a specific amount of time. There are specific conditions surrounding the ability to withdraw the funds. It can include penalties when the depositor makes an early withdrawal. It is due to this sacrifice of liquidity that banks offer favorable interest rates in comparison to most basic savings accounts. The TD/CD accounts provide banks the funds necessary to lend money to other individuals or entities. The bank makes a profit by lending money to others seeking funds. They charge a rate higher than that they offer their TD/CD account holder.

TD/CD’s in Panama

We are taking a closer look at TD/CD in Panama and why the local banks are paying much higher returns. Yes, higher than banks in Europe or North America. The Panamanian economy grew by 5,3% in 2017 and 3,7% in 2018, higher than North America and the Eurozone. The economy of Panama is a fully dollarized free market.

In Europe and North America, we are used to low-interest rates, low inflation, high debt, and money printers working nonstop. Hence, it creates very low savings rates for savings, money market accounts, and TD/CDs. Panama is different and offers one of the highest US Dollar TD/CD rates in the world. Also, it has a healthy economy ( like Europe and North America used to be). There is a Balance between interest on savings and the cost of capital. For example, the interest cost on local mortgages are in 6-9% Range )

If you have savings in US dollars and you wish to invest in a Panamanian TD/CD, there is no currency risk. The principal and interest are payable in US dollars and there are no local or withholding taxes. Besides, there is a very strict secrecy law. If your savings are in a different currency such as Euros, you can exchange it to US Dollars. Upon maturity, the principal and interest are payable to you in US Dollars as well. Let’s say you decide to exchange back to Euros there is, of course, a currency risk. However, where there is risk there is also reward. If the Euro was weak during the time of the TD/CD you will also have currency gains in addition to the interest.

You can, of course, keep your money in US dollars and either renew the TD/CD or make local US dollar investments. A good option is buying an apartment for your own use or for rental income. We can help you find good deals.

Panamanian Banks do not carry FDIC insurance like banks in the United States do.  However, all banks need to hold a reserve account of a certain percentage of the entire bank´s deposits. This reserve is held by the government Bank of Panama (BNP – Banco Nacional de Panama). Moreover, the BNP monitors each bank’s credit policies to ensure that no irregularities exist. Also, that depositors’ funds are not misappropriated.

Each bank has government-appointed compliance officers that monitor the bank’s activities. Some banks maintain a private insurance policy, as well, through large international insurance companies, protecting against fraud, theft, etc.

The minimum opening balance for a TD/CD is usually USD 10,000 and the time range is 30 days to 5 years. You have options on when to collect the interest. It can be monthly, quarterly, annually, or at maturity. The Interest rates vary depending on the amount you invest, the time range, and when you collect the interest. As an example, a friend of mine recently established a $100K 1 year TD/CD with interest at maturity at 4% (an incredible rate). Also, you need to establish an account with the bank holding the TD/CD. It is common to establish a local company or foundation for the account opening. Be patient as it’s a bit time consuming and a lot of documentation is required. Feel free to contact us about rates for legal fees as well.

About us:

Region Panama S.A. is a full-service real estate brokerage firm. We are based in Panama City. Whether it is a city, beach, or mountain properties you are after, let us know. We have many years of experience in the Panama real estate market.

Please contact us if you would like more information on Panama real estate. If you would like more information on a TD/CD’s, we are happy to refer you to a local bank

Henric Ekehed


[email protected]


2 thoughts on “Time Deposits in Panama

  • on October 22, 2020

    Sr. Carlos, Congratulations on your new venture. Best wishes for continued success. When circumstances permit we will continue our journey to Panama and contact you concerning properties in Coronado and Gorgona! All the Best, Charles & Carol

  • on April 14, 2022

    I really like and appreciate your blog article. Really thank you! Awesome. Elmo Sentell

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