Expat rates: new savings accounts for expatriates
by Charlotte Beugge
It's all change for expatriate savers this week with some of the most popular names increasing rates and even launching new accounts.
And that must be welcome news given that yet again, UK base rate has been left unchanged at 0.5 per cent.
The biggest changes come from Nationwide International, the offshore arm of Britain’s largest building society.
After a long absence from the top position in the interest rate tables, it has repriced its fixed rates and now looks far more competitive. It has also launched a whole new range of savings accounts just for expats. This is important because it suggests that Nationwide is dedicated to the offshore market. With the imminent departure of the Yorkshire Building Society, Nationwide and Skipton are the only two UK building societies with offshore arms appealing to new savers.
The new Nationwide variable rate savings accounts are replacements for the Sterling, Euro and US Dollar Tracker Premium accounts which have all been withdrawn.
For sterling denominated accounts, the new Nationwide deals are Sterling Bonus Access, Sterling Bonus 1+ and Sterling Bonus 95 accounts. The Sterling Bonus Access account pays 1.85 per cent on deposits between £5,000 and £24,999. This includes a bonus of 1.35 percentage points for the first 12 months. For deposits of £25,000-plus the rate is 2.4 per cent including a 1.9 point bonus for the first year.
Savers can opt for monthly income with rates of 1.65 per cent and 2.2 per cent depending on balance. You can withdraw without losing interest four times a year.
The Sterling Bonus 1+ account pays 2 per cent on balances between £5,000 and £24,999 – 1.9 per cent for monthly income. For balances of £25,000 or above, the rate is 2.55 per cent or 2.48 per cent for monthly interest. Again, the rates include bonuses paid for the first 12 months – 1.25 points or 1.8 depending on the balance.
Sterling Bonus 95 pays 2.1 per cent (2 per cent on monthly income) on balances between £5,000 and £24,999 or 2.65 per cent (2.55 per cent) on amounts above £25,000. These are the best notice account rates on offer, although you can just about do better with a no-notice account – AIB International’s 2.7 per cent. With Sterling Bonus 95, you can only get at your money by giving 95 days’ notice. The bonuses are again 1.25 per cent and 1.8 per cent depending on the balance.
The US dollar account pays 1.05 per cent on $5,000 to $24,999 or 1.6 per cent on $5,000-plus; the euro version pays 1.8 per cent and 2.35 per cent depending on the balance. Again, there are bonuses attached and it is this that makes the new Nationwide offers interesting. Bonus accounts have for the past couple of years been popular onshore, with many offering rates better than those accounts with no strings attached.
However, offshore savers may be more interested in fixed savings rates than variable rates. Nationwide has reissued its Lifetime Guarantee 1 and 3 with some improved rates and new tiers for high deposits. On Lifetime Guarantee 1 the one-year fixed rate for deposits from £5,000-£49,999 is now 2.55 per cent, up from 2.35 per cent. For deposits between £50,000 and £99,999 the one-year fixed rate is now 2.9 per cent, an increase from 2.75 per cent. There is a new tier for deposits of £100,000-plus of 3.25 per cent.
On Lifetime Guarantee 3, the three-year fixed rate on £5,000-£49,999 is now 2.65 per cent, a rise of 0.05. There is no change in the next tier, which remains at 3 per cent fixed for three years but there is a new tier for £100,000-plus paying 3.35 per cent.
Alliance & Leicester International has also increased its fixed savings rates by up to 0.5 of a point.
It is paying 3.8 per cent on its two-year fixed-rate deal, up from 3.3 per cent and a chart-topping 4 per cent on three years – up from 3.5 per cent. It has not changed its five-year fixed rate deal, which stays at 4.15 per cent and is still one of only two (the other being Clydesdale International) paying this rate.