Expats are hedging their bets against interest rates by shunning fixed term saving accounts in favour of variable rate accounts.
Fixed term rates remain static, with only the Newcastle Building Society launching a new two-year bond of 1.85% for a minimum £500 deposit.
Savers and lenders are hesitant about committing to fixed term rates because of mixed messages from the Bank of England.
The latest indication is interest rates will rise – but no one is prepared to say when.
The best guess is little will happen until after the next general election in May 2015. If rates do rise, a modest 0.25% is mooted as the first increase.
Best offshore rates
For variable accounts, Skipton International has pulled a 2% rate on a £10,000 deposit because too much money was flowing into the bank.
Best instant access rates are with the Leeds and Newcastle Building Societies all offering interest rates of just over 3% for nominal deposits – £50 with the Leeds and £1 with the Newcastle.
The thinking behind savers switching from fixed to variable offshore rates is to be ready to shift cash into the best deal as and when interest rates rise.
To achieve a return of more than 3% on a fixed rate, savers would have to put at least £5,000 aside with Conister Bank, which offers 3.75% over a five year term.
| Offshore Fixed Term Savings Accounts - by interest rate | |||
|---|---|---|---|
| Provider | AER | Term | Deposit |
| Conister Bank | 3.75% | 5 Year Bond | £5,000 |
| Skipton International | 2.75% | 5 year Bond | £10,000 |
| Conister Bank | 2.75% | 3 Year Bond | £5,000 |
| Nationwide | 2.30% | 3 Year Bond | £5,000 |
| Skipton International | 2.25% | 3 Year Bond | £10,000 |
| Conister Bank | 2.25% | 2 Year Bond | £5,000 |
| Permanent Bank | 2.11% | 5 Year Bond | £20,000 |
| Permanent Bank | 2.06% | 3 Year Bond | £20,000 |
| Santander | 2.05% | 3 Year Bond | £200,000 |
| Permanent Bank | 2.03% | 2 Year Bond | £20,000 |
| Conister Bank | 2.00% | 1 Year Bond | £5,000 |
| Permanent Bank | 1.99% | 18 Month Bond | £20,000 |
| Newcastle Building Society | 1.85% | 2 Year Bond | £500 |
| Permanent Bank | 1.84% | 15 Month Bond | £20,000 |
| Leeds Building Society | 1.50% | 1 Year Bond | £1,000 |
| Permanent Bank | 1.50% | 1 Year Bond | £20,000 |
| Santander | 1.50% | October 1, 2016 | £200,000 |
| Newcastle Building Society | 1.50% | 1 Year Bond | £500 |
| Nationwide | 1.45% | 1 Year Bond | £50,000 |
| Nationwide | 1.36% | 6 Month Bond | £50,000 |
| Offshore Fixed Term Savings Accounts - by deposit amount | |||
| Provider | AER | Term | Deposit |
| Newcastle Building Society | 1.85% | 2 Year Bond | £500 |
| Newcastle Building Society | 1.50% | 1 Year Bond | £500 |
| Leeds Building Society | 1.50% | 1 Year Bond | £1,000 |
| Conister Bank | 3.75% | 5 Year Bond | £5,000 |
| Conister Bank | 2.75% | 3 Year Bond | £5,000 |
| Nationwide | 2.30% | 3 Year Bond | £5,000 |
| Conister Bank | 2.25% | 2 Year Bond | £5,000 |
| Conister Bank | 2.00% | 1 Year Bond | £5,000 |
| Skipton International | 2.75% | 5 year Bond | £10,000 |
| Skipton International | 2.25% | 3 Year Bond | £10,000 |
| Permanent Bank | 2.11% | 5 Year Bond | £20,000 |
| Permanent Bank | 2.06% | 3 Year Bond | £20,000 |
| Permanent Bank | 2.03% | 2 Year Bond | £20,000 |
| Permanent Bank | 1.99% | 18 Month Bond | £20,000 |
| Permanent Bank | 1.84% | 15 Month Bond | £20,000 |
| Permanent Bank | 1.50% | 1 Year Bond | £20,000 |
| Nationwide | 1.45% | 1 Year Bond | £50,000 |
| Nationwide | 1.36% | 6 Month Bond | £50,000 |
| Santander | 2.05% | 3 Year Bond | £200,000 |
| Santander | 1.50% | October 1, 2016 | £200,000 |
| This list covers most major providers but is not exhaustive. Account rates and minimum deposits are likely to change or be withdrawn at short notice. Some minimum deposits are 'open with' amounts and are scaled up to the headline rates with a bonus or increased deposit amount. | |||
Offshore savings providers
Here’s a list of 10 of the leading offshore savings providers with links to their web sites:
- Conister Bank – Private personal and commercial banking from the Isle of Man
- Investec – Offers international banking services, including savings and investments from the Channel Islands
- Leeds Building Society – Gibraltar branch of the UK based building society serving expats
- Lloyds Bank International – Channel Islands and Isle of Man personal banking for expats
- NatWest Bank – Offshore saving rates from branches in Gibraltar, the Isle of Man and Channel Islands
- Nationwide Building Society – The international service of the popular UK building society
- Newcastle Building Society – Expat saving and banking services from Gibraltar
- Permanent Bank – Isle of Man branch of an Irish-based bank
- Santander – Isle of Man branch of this international bank with a UK high street presence
- Skipton International – Channel Islands branch for expats of the UK building society
Other offshore financial institutions are available and will be added to the list when they issue new products for expat savers.
