It might seem as though savings accounts are a waste of time, but, says Hannah Beecham, it is possible to get a good return by investing off-shore
Hands up those who still remember the concept of saving for a rainy day? The good news is that - despite interest rates being at the lowest we have ever known - there are still some reasonable returns to be had from savings accounts, but only if you are prepared to shop around.
Savers on the brink of moving abroad can at least take heart from the fact that the rates on offer from the offshore subsidiaries of the main high street banks are no no worse than they are onshore. Protection is the key issue when saving outside the UK. Jersey, Guernsey and the Isle of Man now offer depositors' compensation schemes that will cover the first £50,000 of your investment. If your savings pot exceeds that ceiling you must spread it across a number of deposit-takers to ensure it is fully protected.
A little window-shopping in the offshore savings market will pay in the long run. And when it comes to deciding which windows to peer into, savers are directed towards the most recent account launches offering bonuses specifically to attract new business.
Skipton Guernsey, having merged with Scarborough Channel Islands, has launched its International Bonus Account, attracting new customers with a minimum rate of 2% gross per annum in the first year, plus an additional bonus of a further 1% on balances of £10,000 or more. Savers opening an International Bonus Saver Account with Lloyds TSB Offshore can earn a monthly interest rate of 2.50% of which 0.50% is the bonus element paid for the first 12 months only. Alliance & Leicester International, likewise, welcomes new savers to its eSaver Offshore Notice 50 Account with a tantalising 3% rate. And the same rate is offered by Britannia International to those making a regular investment of at least £50 per month into its Regular Saver Account.
If your rainy day money can be locked away for longer periods of time, you can expect even better rates. For balances of £10,000 or more Clydesdale Bank International is paying 4.50% for a three year fixed term and as much as 5% for a five year fix. If you don't want to save for longer than two years, Anglo Irish Bank (International) will fix the rate at 3.95% for a minimum deposit of £5,000.
To loyal investors sick of languishing on rotten rates whist newcomers scoop the treats, my advice is to move your savings to a new deposit-taker. In this day and age, alas, loyalty is too often taken for granted and seldom rewarded.
Expat Money: The Definitive Personal Finance Manual for Brits Abroad by Hannah Beecham and published by Summersdale, price £8.99, is available from www.summersdale.com, all good bookshops and internet booksellers.
