[Carey]

Anyone got any comments on Northern Rock offshore account for the proceeds from our house sale? Annual interest 5.35%. So many others have poor credit ratings.

[vixxann]

Hi Carey - I'm going to watch your replies as we are also looking where to put ours - its a minefield (but that seems to be the situation with EVERYTHING I look at these days!!)

Vicki

[victoria24]

be careful with the interest rate. if it is quoted as the "aer" that means annual equivalent rate. its very difficult to establish what that means for comparison as they all have different ways of calculating the interest. you can try asking what it is equivalent to as I have on many occassions but no one ever knows!!

[Mickstim]

We have used Alliance & Leicester offshore at 6.3% Hopefully they are quite sound!

Bx

[victoria24]

in the current market, most financial advisers would recommend spreading your money to make sure you are covered under the financial ombudsman scheme. About 30k in each account would see you protected in the event of a run on a bank again. remember that you are only covered for the first 30k in the event of a collapse so if you had 150k with 1 bank you "could" lose 120k whereas if you had 5 accounts with 30k in each, you would be safe whatever happened. i would prefer to sleep well even if i lost 1% a year overall but like anything there is no right or wrong, it all depends on your attitude towards risk.
also, there is no interest paid on premium bonds but they are safe as houses, you can have 30k per adult and you may win throughout the year!

[slider]

To supplement victoria24's excellent advice take a look at this article.
http://www.thisismoney.co.uk/ask-an-expert/savings/article.html?in_article_id=424410&in_page_id=111

The website appears to be a decent reference for all things fiscal, in the UK at least.

[lnz]

Anyone got any comments on Northern Rock offshore account for the proceeds from our house sale? Annual interest 5.35%. So many others have poor credit ratings.

When are you planning to move to NZ?

Nationwide International have an offshore account (http://www.nationwideinternational.com) paying 6.65%. This also has the option to defer interest, which might suit you if you are a UK tax payer at the moment and moving to New Zealand in the next year or so. New Zealand has an overseas passive income exemption for the first 4 years for new migrants. See http://www.ird.govt.nz/yoursituation-nonres/move-nz/temp-tax-empt-foreign-inc.html for more details.

Be careful though, you can't claim Working for families tax credits at the same time as the passive exemption so need to decide which is the best option for you.

[victoria24]

btw, i own a financial services company so this is free advice!!

[Carey]

Thanks for all the advice, esp. Victoria your free advice. It does seem that some of the higher interest rates offered are more risky as they are desperately trying to attract investors.

[IanR]

I find this site great for up to date interest rates:

http://www.thisismoney.co.uk/saving-and-banking/best-savings-rate/article.html?in_article_id=394167&in_page_id=50

or find your own:

http://www.moneysupermarket.com/SavingsP/CompareSavingsForm.asp

HMG will repay £35,000 in full to anyone caught by a collapse - increasing to £50,000 when legislation is approved in September(ish).
Perhaps though it may pay to be careful when using the Icelandic or especially Nigerian banks who are amongst them - The Sunday Times wrote that they would not be covered in full last week - I'm not sure - however here's what Icesaver says

"You are benefiting from exactly the same level of deposit protection as every bank in the UK

The maximum protection per account holder is 100% of the first £35,000 of savings that you hold with us (the same as every FSA regulated bank and building society in the UK). In the unlikely event of a claim, any compensation is payable within three months.

The protection itself is provided by two schemes (sometimes referred to as a passport scheme) – the end result being that the total amount protected is the same as if your savings were only protected by the UK Financial Services Compensation Scheme. The protection works as follows:

* The first level of protection is provided under the Icelandic Deposit Guarantees and Investor-Compensation Scheme. The maximum protection under this scheme is 100% of the first €20,887 (or the sterling equivalent) of savings that you hold with us.
* The second level of protection is provided by the UK Financial Services Compensation Scheme (www.fscs.org.uk). This scheme tops-up your protection so that the protection per account holder, under both schemes, is equal to 100% of the first £35,000 of savings that you hold with us.
* Under EU law compensation for any losses incurred due to the failure of a bank should be paid within three months - regardless of whether it is through a passport scheme or the UK Financial Services Compensation Scheme."

There appears to be some outstanding rates around at the moment and if, IF, rates fall to 3 or 4% next year to boost the economy you're going to look pretty smart if you've tied up a 3 or 5 year deal at 7% (if of course you can run to that time frame).

[Alan]

I have been looking at this and for us we want to have the flexibility of being able to buy a property should we see one we like at the right price. Having an offshore account doesn't give us this as to get the really good rates you need to leave your money for a certain period of time, and even after then they do not seem to be especially flexible in terms of access.

For us it is really looking like sending the money across straight away and finding the highest earning account we can over there as the rates are superb right now anyway.

[Peter&Liz]

One thing to bear in mind if you have a lot of capital is that the £35,000 protection under the FSCS is per Institution not per bank. So if for example you had £100K split equally between Intelligent Finance, Halifax and Bank of Scotland you would only have £35k protected.

Also if the account is registered in two names you receive twice the protection £70k, £35k for you and £35k for your partner.

There is a decent guide here from Martin Lewis in keeping your savings safe but this only applies to savings held in the UK.

http://www.moneysavingexpert.com/savings/safe-savings#foreign

However I don’t think the FSCS protection covers offshore accounts,the Isle of Man will protect 75% of the first £20k and there is no depositor protection whatsoever in Guernsey and Jersey.

http://www.fool.co.uk/news/your-money/savings/2007/10/18/are-offshore-savings-accounts-safe.aspx

Peter

[benhila]

We have just closed our Alliance & Leicester offshore account (sigh of relief). Good interest rate but IMO the service is appalling. The only contact is via secure messages which the A&L staff seems to respond to at their leisure. A BACS transfer instruction we made wasn't executed after 5 working days(!) and when we complained we were told that the bank does not guarantee transfer within this time period (normally, and with Nationwide International, a BACS transfer takes 3 working days at most). Similarly, yesterday when we instructed a CHAPS transfer (same-day transfer by definition) we were told by a sour customer service rep (who refused to transfer the call to the on-line team) that same day transfer is not guaranteed. Why do they charge £30 than? I don't want to rant on and on, but I strongly recommend that you use other offshore banks if you tend to get high blood pressure under stress!

Hila