Offshore Savings

Winning rates for offshore savers

Offshore savings accounts used to be the preserve of the well-off. But as Rachel Thrussell, Head of Savings at Moneyfacts.co.uk, comments, nowadays many offshore accounts may be opened with a minimum deposit of just £1,000. And confirming what many long-term expat savers already know, Ms Thrussell points out that the rates available on offshore accounts are just as competitive as their onshore counterparts.

The table below reveals the current best paying accounts alongside the top paying onshore equivalent rate – in most cases the offshore accounts prove to be more generous.

Kaupthing Singer  & Friedlander (IOM) is offering three accounts at mouth-watering rates. Two from the Platinum suite of accounts on a 90 day and 32 day notice term (on the £10,000 level) easily outstrip the rest with rates of 6.82% and 6.72% respectively.

Next in line is the Bank’s latest launch, the Kaupthing Edge Savings account offering all balances of £1,000 an equally impressive rate of 6.65%.

What’s more, savers will be attracted to the bonus that this account is offered on a no-notice basis. (For further information on the Kaupthing Edge account turn to page 2 of this issue.)

Anglo Irish Bank’s (IOM) Privilege 30 (30 day notice) account is hard on Kaupthing Singer & Friedlander’s heals offering 6.50% for balances of £5,000 or more. Landsbanki Guernsey’s International Tracker 90 is next in line with an offer of 6.36% for sums of £10,000. This rate just beats Alliance & Leicester International’s offering to expat savers with its eSaver Offshore no notice account which is enticing savers with a rate of 6.30% on balances of just £1,000.

Latest news from Alliance & Leicester International includes the launch of two online accounts, eSaver Offshore Notice 50 (Issue 1) and eSaver Offshore (Issue 2). In the first instance, the account is on a 50 day notice for withdrawals which means an interest charge of 50 days interest will be applied if accountholders make instant withdrawals.

ALIL describes this account as being suitable for “serious savers who don’t require immediate access to their funds and can plan their withdrawals in advance.”

The rate in this instance is 6.35% gross pa. And the second account which requires an opening balance of £15,000 pays its interest annually – in this case 6.25% gross pa.

The account is offered on a no notice basis and the minimum withdrawal sum is £5,000. Both accounts are made available exclusively online – so no forms to print or post.

Nationwide International has also announced new savings rates on its Base Rate Tracker Premium and its Lifetime Guarantee accounts. The Lifetime Guarantee account offers an increase of 0.25%, which means its paying a competitively-priced fixed annual interest rate of 6.65% gross pa for the first year (6.45% gross pa monthly interest), followed by guaranteed links to the Bank of England base rate, thereafter.  And on the second account, the Base Rate Tracker Premium account, the increase to its premium is 0.05%.

Therefore, offshore savers are now reaping up to 6.30% gross pa/AER, and an increased variable rate premium of up to 1.30% above the Bank of England base rate for the first year, again, followed by guaranteed links to base rate, thereafter. It’s worth noting that interest rates on Nationwide International's other sterling accounts have been reduced between 0.25% and 0.30%.

All US dollar accounts have been reduced by 0.25% in line with recent change to the US Federal Reserve Base Rate.

Skipton Guernsey has announced that following the cut in the Bank of England’s base rate last April, it did not cut the interest rates it pays to many savers.

“Skipton Guernsey did not cut rates to savers after the last base rate reduction in February this year, demonstrating its strong claim to be the ‘friend of the saver’ with a policy of paying consistently good value interest rates,” is how this offshore deposit-taker describes its actions. This means Skipton Guernsey savers are now earning up to 6.25% gross pa/AER with the Sterling Island Ninety account.

However, rates have been cut by 0.15% on Skipton Guernsey’s easy access accounts such as the Sterling Access Plus account, which offers four penalty free withdrawals per annum, and is now paying up to 5.60% gross pa/AER.

Ken Jones, Manager, Investments comments, “Following the last two cuts in UK Base Rate in February and April, we have been able to hold our savings rates and will do so whilst market conditions allow…. We understand the importance of issues such as reliable and transparent interest rates, and our reputation built up over the last 10 years is testament to this. Savers nowadays can be confused by some of the newer offerings appearing, so we think it is reassuring to be able to rely upon a tried and trusted home for your savings such as Skipton Guernsey.”

Other offshore deposit-takers who are currently holding their position in the best rates league tables across the three main currencies, sterling, US dollar and euro, include the following: Bank of Scotland International, Scarborough Channel Islands, Investec Bank (CI), Schroders (CI), Fairbairn Private Bank, Royal Bank of Canada (CI), Clydesdale Bank International, Abbey International, Bradford & Bingley International, Standard Bank, Lloyds TSB Offshore, Irish Permanent International, and Irish Nationwide (IOM).

Expat savers should bear in mind that in all cases, the best paying accounts apply In certain categories.

If you find a best-paying no notice account, do not assume that that particular offshore deposit-taker will be offering the best paying accounts available under different terms.

It may well be that best –paying accounts on notice terms are available from a different provider. Always compare like-with-like and make sure your research covers a number of savings account providers.

• Click to find out more on the companies mentioned is this story
• Alliance & Leicester
• Anglo Irish
• Bradford & Bingley International
• Irish Permanent
• Royal Bank of Canada
• Singer & Friedlander
• Skipton Guernsey