Offshore savings Updated:
If you thought savings rates onshore were bad, spare a thought for expats living elsewhere – because their rates are even worse. Thanks to a distinct lack of competition in the market there are increasingly few offshore accounts available to savers, and that lack of competition means the few providers out there don't feel the need to offer great rates in order to tempt you.
So, if you're an expat looking to make the most of your savings, just what can you do?
A lot of people might choose to lock their money away for a few years, with three and five-year accounts often generating the best returns. Skipton International currently offers an account paying 2.75%, and although it's slightly less than onshore alternatives (currently the best buy comes from FirstSave, whose five-year bond pays 3.25%) it could still be a decent home for your money.
However, a word of caution. Just think about how long you're actually tying your money up for – could things change by then? A five-year fix will see you locked into the same interest rate until 2019 and hopefully rates would have started to nudge up by that point, so you might like to consider a shorter fix instead.
A short-term bond will generally pay less than a longer-term alternative, however there are deals that can be found – Permanent Bank International offers a competitive 1.85% on its one-year fix, 2.04% for a 15-month bond or 2.08% for two years, for example – and by the time the bond reaches maturity interest rates could start to rise.
Of course, with interest rates there's no guarantee of what's around the corner, so it all comes down to putting your money where you feel most comfortable. Hopefully a decent return will be generated in the process, and ideally offshore savers won't have to suffer from pitiful interest rates for too much longer.
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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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