[Belmont Babes]

When we have the funds sat in the bank after house sale do we wait for a good rate and then exchange to NZ dollars? We need to use the interest to help fund the rent for a short period before buying. Are interest rates higher in NZ or UK? Sorry but I don't enjoy financial matters :wah Thanks for help

[Chiba]

Unfortunately it's a chaotic time to be making decisions like this. The exchange rate is currently quite good, but things are unstable as yet. You can try this site (http://www.xe.com) for the conversion rates and historical charts. As to money in the bank, it depends on where your money is. Having money in NZ may not be the best option. I can earn 6.3% pa in an NZD denominated one month rolling time deposit in Japan, for example. Bank of New Zealand only seem to offer 5% or so. Your mileage will vary. Offshore (Isle of Man) may be an option, as you may need to consider any taxes on your interest. No doubt someone will be along to tell you about tax amnesties and the like.

[UK Neil]

...No doubt someone will be along to tell you about tax amnesties and the like.

this has been said a few times but its potentially useful info....If you are emmigrating for good you should be entitled to 'not ordinarily resident' status and can fill in an r102 form and give it to your bank and you wont pay tax on your savings in the UK. The four year rule for new migrants means you wont pay tax on it in NZ for the first 4 years either. You can get 6.3% in uk savings accounts, so if you decide not to change up immediately, that could be a nice earner.

[sfordjasiri]

I can't tell you whether it is a good time to change your money to NZ dollars at this time, but I can tell you interest rates you can get.

I am currently getting 7.5% in a 30 day CD through Bank of New Zealand. Every 30 days it is automatically reinvested for another 30 days.

Bank of New Zealand also has another offer where if the combined total of all your accounts with them is above some threshold (don't know if it is 10,000 or 100,000 or something else) they pay you 8.5%.

[Chiba]

Just out of curiosity, how much tax do you pay on bank interest in NZ?

[barryp]

You choose the rate to match your overall IRD tax bracket, minimum 19.5%. If you don't provide an IRD number and specify a rate, withholding will be punitive.

[DMcG]

Rabo Plus (http://www.raboplus.co.nz) do 1 month rolling term deposits at 8.1% no fees, no charges :D

Dougie

[suebeenz]

Just to put out another suggestion, you could bring your money over, and hold your foreign currency in the bank here in NZ. They will likely give you a better interest rate on the currency, then at back home. However, I can't say for sure, since don't know what UK rates are. Last time I looked, US interest rates offered here were at least a couple points higher than what US banks were offering.

The nice thing about holding the money that way, is that not only do you get paid good/better interest rates, but you can easily and quickly exchange money when you need it. (like when dollar drops 4 cents overnight)

[Super_BQ]

The four year rule for new migrants means you wont pay tax on it in NZ for the first 4 years either.

Just for clarification, the 4 year exemption rule only applies to returning NZ citizens who have been living overseas for a period of at least 10 years. The exemption is also only a 1 off so one can't leave and re-enter NZ to claim another 4 year exemption in their lifetime.

Last time I looked, US interest rates offered here were at least a couple points higher than what US banks were offering.

I found this to be the opposite for US currency and true for other foreign denominations. Current US reserve rate is 5.4% while Bank of NZ last week was only willing to offer me a measling 3.9%. However, the opposite was true for Canadian currency put in term deposits. Typically, you can find better rates at currency brokers than at the banks (but with the loss of flexibility).

[suebeenz]

I found this to be the opposite for US currency and true for other foreign denominations. Current US reserve rate is 5.4% while Bank of NZ last week was only willing to offer me a measling 3.9%. However, the opposite was true for Canadian currency put in term deposits. Typically, you can find better rates at currency brokers than at the banks (but with the loss of flexibility).

I might just be getting the shaft, but US banks are offering me 2% but would pay as much as 3% if my balance was sufficient enough (but it isn't). If you're able to reach close to reserve rate, without putting it in a CD, perhaps time for me to ring some bank managers ...

Personally, I actually have most of my money in brokerage account, which may be a nightmare come tax time, because supposedly capital gains are not considered nz-tax exempt under any circumstance.

[Super_BQ]

Hi Sue,

You may already know this. Sorry if I re-iterate. Yes it's common for chartered banks to low ball customers on savings accounts. As you may know, the only way to get near federal reserve rates (while maintianing near risk free returns) is to go with one of the numerous brokerage guys like Schwab, Fidelity, Merril Lynch, and 20 other big boys that operate in the US.

The reason why charter banks in the US give you the shaft is because they can take your savings (which they pay you little interest) and re-lend it out at a much higher rate (which is usually more than the federal reserve rate). At these levels, the US federal reserve may simply say to the banks - sorry we're not going to give you cheap loans. So instead, the banks go taking it from their customers current deposits.

Personally, I actually have most of my money in brokerage account, which may be a nightmare come tax time, because supposedly capital gains are not considered nz-tax exempt under any circumstance.

Perhaps you're still a US passport holder and thus must require to file a return to the IRS every year. If not, I don't see why there would be any complications according to here:

http://www.snowbirds.org/html/IRSForms.html

Just fill out the W8-BEN form that declares you're a foreigner and the brokerage house will not deduct any capital gains. (nor track any 'wash sale' rules). :nice1 The only thing they take is the 33% with-holding tax on interest and dividend earned in the portfolio.

[barryp]

Just for clarification, the 4 year exemption rule only applies to returning NZ citizens who have been living overseas for a period of at least 10 years. The exemption is also only a 1 off so one can't leave and re-enter NZ to claim another 4 year exemption in their lifetime.

The four year temporary exemption on taxation of foreign income most definitely DOES apply to new migrants who become NZ tax residents, not just a particular type of returning NZ citizen.

http://www.ird.govt.nz/yoursituation-ind/earning-income/temp-tax-empt-foreign-inc.html

Please do us the favour of the most minimal research before you talk out of your hindquarters yet again. I grow tired of reading your chronic nonsense here. :mad:

[Super_BQ]

As barry has pointed out, the foreign tax exemption applies to new residents too. I was certain from a conversation from Dr. Culleen's PR (late last year), he told me it only applied to NZ ex-pats.

Please do us the favour of the most minimal research before you talk out of your hindquarters yet again. I grow tired of reading your chronic nonsense here.

:eek: No need to go all attitude on me. This was a clear mistake and a short oversight on my part. We're entitled to our input and opinions whether right or wrong and if someone is wrong, it's good to see someone can correct it. I can understand you don't like my input "chronic nonsense" but I think we're all better off without the derogatory remarks.

[roddixon]

Just to put out another suggestion, you could bring your money over, and hold your foreign currency in the bank here in NZ. They will likely give you a better interest rate on the currency, then at back home. However, I can't say for sure, since don't know what UK rates are. Last time I looked, US interest rates offered here were at least a couple points higher than what US banks were offering.

The nice thing about holding the money that way, is that not only do you get paid good/better interest rates, but you can easily and quickly exchange money when you need it. (like when dollar drops 4 cents overnight)

Could someone please point me in the direction of these accounts and which particular banks offer them.

Thanks
Steve

[Nick88]

I asked the ASB about this a few years ago and they said it wasn't a problem. Don't know what sort of interest you would get or what the exchange rate spread is, you would need to email them about that.

Remember, you are in a position of strength here. They want your deposits, and you can shop around for the best deal. Get them to quote for your business.