If someone is considering buying a CD at a foreign bank chasing higher interest rates, be aware that US citizens are required to file one or two special US government forms reporting their foreign bank accounts if their foreign accounts exceed specified thresholds. The penalties for not filing are relatively significant. Also, many US citizens with foreign bank accounts have a tax professional prepare their reporting form(s) and may incur an extra preparer cost.
Here are the forms:
FinCEN’s FBAR:
Report Foreign Bank and Financial Accounts | FinCEN.gov
IRS’s form 8938:
About Form 8938, Statement of Specified Foreign Financial Assets | Internal Revenue Service