Best Investments for Immigrants

Three Best Money Investments for Immigrants

1. High Yield “Online Savings Account”

An “online-only” high-yield savings accounts provide better earnings due to higher “earning interest” rates. They are offered by lesser-known banks who often don’t advertise or maintain a physical office, enabling them to provide better deals than regular banks.

PROS: HIGH-YIELD ONLINE SAVINGS FOR IMMIGRANTS

  • Online savings may offer up to 5.30% APY; regular banks offer below 0.01% APY.
  • Online Savings can be your second account to spread your savings.
  • Some offer Paperless checking accounts (e.g., Zelle, e-Checking).
  • Transfer money or pay bills using e-Checking with online banks.
  • Most banks are FDCI Insured.

CONS:

  • Interest rates with a 4% average APY may change anytime.
  • Limited physical inquiries or no bank branches at all.
  • Must be vigilant for suspected phishing activities.
  • Reliance on internet connectivity.
  • Money transfers may take up to three business days and are usually free, but some may charge.

Online banking: No physical branches, phenomenally higher interest, functions like regular bank via the website.

2. Certificate of Deposit (CD)

PROS: CD INVESTMENT FOR IMMIGRANTS

  • Guaranteed fixed interest rates with a 4% average APY.
  • Low-risk investment option with predictable returns.
  • Suitable for short to medium-term financial goals.
  • They are insured by the government (FDIC Insured).

CONS:

  • To maximize APY, money must be untouched for at least one year.
  • Limited liquidity with penalties for early withdrawals.
  • Lower returns compared to other investments.
  • No flexibility in interest rates during the term.
  • Not suitable for emergency funds due to limited access.

If your cash isn’t needed for a year or more, invest in a Certificate of Deposit (CD). If you need the money within five months, a high-yield “Online Savings” is better.


CDs are commonly obtained through regular banks with a Brokerage Account managed by a financial adviser.

3. Roth Individual Retirement Account (Roth IRA)

A Roth IRA is a retirement account (named after Senator Roth). You contribute after-tax money, but your contributions and earnings grow tax-free. When you retire at age 59½, and after five years of account opening, you can make tax-free withdrawals.

Convert your traditional IRA to Roth IRA

If you are an immigrant who arrived and started to work in the USA around age 50, a Roth IRA is an ideal savings retirement fund if you do not have an adequate 401K.

Roth IRA is typically opened in a bank. The potential returns may vary between 7% and 10%, but it comes with inherent investment risks just like other investments.

Furthermore, your heirs won’t pay taxes on the remaining funds if you pass the Roth IRA to them.

PROS: ROTH IRA FOR IMMIGRANTS:

  • Tax-free withdrawals in retirement with after-tax contributions.
  • No required minimum distributions during the account owner’s lifetime.
  • Flexibility to withdraw contributions penalty-free before retirement.
  • Assets can be passed on to beneficiaries or heirs tax-free.

CONS:

  • Income limits may restrict higher-earning immigrants from contributing.
  • Contributions are not tax-deductible, providing no immediate tax benefits.
  • A stable source of income (permanent employee) is required for regular contributions.
  • Long-term commitment.

Which bank is the safest way to invest?

Top Banks with over 1 to 3 Trillion assets:

  • Chase
  • BOA
  • Citibank
  • Wells Fargo

Top Banks with 200 to 600 Billion assets:

  • U.S. Bancorp
  • Truist Bank
  • PNC Financial Services
  • Goldman Sachs Bank
  • Capital One Financial
  • TD Group US Holdings
  • Bank of New York Mellon Bank
    • State Street Bank
  • BMO Harris Bank
  • First Republic Bank
  • Citizens Financial Bank
  • Charles Schwab
  • Silicon Valley Bank*
  • Fifth Third Bank
  • Morgan Stanley

Most popular banks for high-yield savings

ONLINE BANKING ONLY
SoFi Bank
CiT Bank
BMO Alto Bank:
Western Alliance Bank
Discover Bank

APY AS OF JULY 2023
4.40%
4.60%
4.75%
5.15%*
5.00%*

* No penalty for early withdrawal.

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