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Expat Investor : September 2007
We make life simple for you. 5.29% fixed until 28/08/09 for a personal service Expat BTL Mortgages www.irishpermanentintl.com +44(0)1624 641641 email@example.com Terms & conditions apply. Irish Permanent International is a registered business name of Irish Permanent (IOM) Limited which is licensed by the Isle of Man Financial Supervision Commission for Banking & Investment business. from usually available in sterling and US dollars, giving global investors an opportunity to diversify a portfolio. Some of their accounts will even offer more than 100% capital protection, in which case the accountholder can be sure of a minimum return in all cases. What's more, adds the Bank, the return on capital protected accounts is not expected to fall within the scope of the European Savings tax directive, so all returns are paid in full to the investor. This can be a valuable feature for those planning how best to use tax allowances or those living in a low or zero tax environment. However, individuals still need to check their own tax situation as there may be a potential liability. Focus is the integrated banking and investment service offered by Fairbairn Private Bank. The Bank explains how this account evolved for the expatriate market. "Moving abroad inevitably involves considerable planning and upheaval, and it is often useful to take this as an opportunity to review your financial affairs. Most people these days acquire, over time, a complex network of product and service providers which can often be costly and time consuming to manage, but there is a simpler way to organise your banking and investment needs. "Fairbairn Private Bank's award- winning Focus service can offer a solution. This unique, integrated banking and investment service combines banking, discretionary and/or execution only investment dealing and settlement services into a simple, seamless package which can save you time and simplify your administration." The range of banking services in multi currencies, includes cheque accounts, fixed term deposits, loan arrangements, deferred debit Gold Visa cards, structured, enhanced and fiduciary deposits. Focus also offers investment services, ranging from full execution only services through to discretionary managed investment portfolios. Whether income or growth, domestic or global, and irrespective of the country of residence, clients can design a Nationwide International offers a wide range of accounts covering fixed rate bonds, instant access, notice accounts and euro and US dollar accounts. Another offshore deposit-taker with rates keeping its name in the best buy league tables is Bradford & Bingley International. The accounts on offer here cover easy access, notice periods of 30, 90, 120 and 180 days, money market accounts and sterling bonds. Also on offer is a tax planning account, Accumulation, which can be denominated in sterling or euro. As well as the full complement of sterling accounts, expats can choose from a range of euro and US dollar accounts. Over the past year, Bradford & Bingley International has been keen to promote its eAccess account, and not surprisingly when you look up the rates which have earned it a regular place in Expat Investor's top tier accounts table. At the time of writing the rate on eAccess was 6.35% p.a. John Sheath, Managing Director, says, "Not only are the interest rates extremely attractive, the eAccess account is specifically designed for expatriates. "It's a fully functioning online savings account, whereby you can enjoy the convenience of managing and operating your account at any time day or night from the comfort of your own home. There's no notice for withdrawals and unlike many onshore internet accounts, transfers can be made to nominated accounts internationally via the SWIFT system as well as to nominated accounts within the UK clearing system." Mr Sheath goes on to explain regular savings can be easily set up and changed at any time; you can carry out your own "bed & breakfasting" and change your interest instructions instantly -- for example, if you happen to be between assignments and want to draw a regular income from your savings account for a while. Adding a comment on the direction of sterling base rates Mr Sheath says, "For the medium to long term we are still expecting a relatively stable UK economy albeit with a greater volatility in interest ISLE OF MAN expatinvestor.com 16 EXPAT INVESTOR September 2007 Fast Facts 77013 bespoke account to suit their personal circumstances. This account is available to those with a minimum initial combination in cash and/or investments of £50,000, US$75,000 or 75,000, of which at least £5,000 (or currency equivalent) must be in cash. Each month clients receive a clear and concise statement, showing details of any banking (including Gold Visa card, lending or fixed term deposit) and investment transactions they have made. Fairbairn Private Bank adds, "The ability to transact over the phone makes banking and investment dealing an effortless process and, in addition, your account can be viewed on-line offering the freedom to keep track of your finances round the clock from anywhere in the world." Standard Bank Offshore has launched the latest in its series of Structured Growth Solutions offering investors a choice of two products. The first is called the Global Portfolio Picker. It tracks the returns of three portfolios over a 41/2 year investment period. Each portfolio offers diversification through investment in four asset classes -- equities, commodities, property and fixed income. Investors' returns are based on the best performing of three portfolios, with enhanced participation of 140% for sterling, 120% for US dollar and 105% for euro investors. Capital is protected in full provided the investment is held to maturity and there is unlimited growth potential. And the Blue Chip Booster is the second product designed to pay coupons based on the performance of three of the biggest shares on the London Stock Exchange: BP, HSBC and Unilever. The product terminates on any anniversary of the start date if all three shares are above their respective start values. In such a case, investors receive their original capital along with a coupon of 25% for sterling investors and 20% for US dollar investors for each year the product has been running. Therefore, the shortest period the product may run for is one year and the longest is five years. If the product runs the full five year term and all three stocks end above their respective start values, investors will receive returns of 125% in sterling or 100% in US dollars in addition to their capital invested. Kaupthing Singer & Friedlander (Isle of Man) has recently announced the extension of its Platinum Offshore Account to Continued from page 15 rates, now expected to fluctuate in a range of 4.50% to 6.50% over the next few years." The two Isle of Man-based banks offering great savings opportunities for expats are Anglo Irish Bank (IOM) and Bank of Scotland International. Gary Quaggan, Head of Personal Savings at Anglo Irish Bank (IOM), takes a look at how recent rate rises mean a better deal for expats. "Predicting future interest rates is difficult, as there are just too many variables in the global economy. However, with recent rises in the Bank of England base rate, it looks like sterling savings accounts are going to be an increasingly attractive option for many expats, at least for the foreseeable future. "Savers are certainly going to welcome these new higher rates. At 6.05%, our 7 Day Notice Account is offering the sort of interest rate normally associated with longer term deposit accounts. For those willing to give more notice, our 90 Day Account now offers a very competitive 6.25%. It's not so long ago that to achieve anything like this rate, savers would have had to put money on deposit for 12 months or more." Expats tend to be very interest rate aware, and understand that having a competitive savings account can provide a solid basis for their investment portfolios. For many expats "cash is king", observes Mr Quaggan, as it provides the sort of flexibility they need, and the new higher sterling rates mean that the trade off between interest rate and access is much more in their favour. "Anglo lives up to its promises when it comes to keeping rates consistently competitive, and that we back this up with a high level of customer service," adds Mr Quaggan. Anglo Irish Bank (IOM) also offers AngloConnect, a money transmission account which is managed online. Bank of Scotland International is proud of its reputation as a specialist in the offshore savings market and its fixed rate savings accounts regularly feature in industry best buy tables. The Bank says that UK base rates could rise further before this year is out, but points out that base rates do not actually need to rise for savers' rates to move higher, as many savings accounts, particularly fixed rate savings accounts, are now fixed against the wholesale money market interest rates. "These can and do change on an hourly basis and tend to lead any movements in UK base rates." Bank of Scotland International explains that specialist offshore savings banks use their Treasury functions to lock into these higher rates in the wholesale money markets and are then able to pass them on straightaway to their customers in the form of fixed rate products, irrespective of what may or may not have happened to UK base rates. The Bank is keen to bring to expats' attention the advantages of capital protected accounts -- a product Bank of Scotland International has specialised in. Savers who are looking for a return on their investment which has the potential of being higher than a normal deposit rate, but who are not yet ready to leap headlong into the higher risk world of international equity or offshore fund dealing are opting in increasing numbers for a new breed of product called 'capital protected accounts'. As the name suggests, these accounts offer one of the most important features of a deposit account, namely 100% protection of the capital deposited. Where they differ is that the return offered is not driven by UK base rates, but rather by movements in a single stock market or range of stock indices that the account will track. They are generally available over three or more years. Typically, such accounts offer a return expressed as a proportion of the rise in a given index. So if the UK FTSE market is being tracked and it has risen by 50% over the term of the account, the account holder will receive a given proportion of this rise, which will have been clearly stated in advance. Bank of Scotland International Capital Protected accounts are "... these accounts offer one of the most important features of a deposit account, namely 100% protection of the capital deposited."
July August 2007