Hello, I am not resident and not American citizen. I have opened a saving account last month in a Bank in the us and I have signed a copy of W-8. However, I am reading this month my statement and I earned interest but it was reduced by a legend "federal withholding" for about 30%. I am asking why it happens? What could be the problem? I would believe that interest of bank deposits were tax free. Am I correct?
Thanks in advance.