All EOS blogs All Spain blogs  Start your own blog Start your own blog 

Spain Money Saving Tips and Offers

Save money in Spain. Providing regular money saving tips, tricks, offers, cheap deals and guides for people living in or visiting Spain. Covers shopping,restaurants, going out, supermarkets, insurance, bank accounts, utilities, phone/mobiles etc.

The best monthly income accounts for expats
29 June 2010 @ 15:41

Interest on offshore monthly income savings accounts is falling. If youre with one of the worst paying, then it makes sense to switch now, writes Charlotte Beugge.

If you rely on your savings for income, then you are likely to be suffering at the moment.

Returns on monthly income accounts have fallen dramatically. Even on the better accounts, the returns are not great.

For example, if you had £100,000 in Yorkshire (Guernsey) Global 90 account then the current interest rate is 2.57 percent on monthly savings. That means each month, your income will be about £214 a month. In total, over a year at that rate youll get about £2,570 in interest. Just a few years ago, youd have got more than double that.

And the Yorkshire deal is one of the best-paying monthly income accounts and indeed, one of the dwindling number of offshore accounts which offer the option to get interest paid in instalments. Yet many retired expatriates need their savings to work for them by providing an income which can boost their pension.

Monthly income is usually an option given on normal savings accounts. The only difference is that instead of the interest being paid in one lump sum once a year, it is paid in 12 regular monthly instalments. .

Michelle Slade of Moneyfacts says: Monthly interest is only available on a third of offshore accounts, leaving savers after a regular income from their money in a difficult position.

With rates so low savers are seeing their income depleted and many now have to eat into their capital which only exacerbates the problem.

And it is a big problem but one that you can do something about. Research shows theres a huge gulf between the best paying offshore monthly income accounts and the worst.

Currently, the best rate you can get on offshore monthly income is 2.96 percent on Alliance & Leicester Internationals eSaver (cor) Offshore Flexible Income Issue 1. Alliance & Leicester is now part of the giant Spanish banking group, Santander (Madrid: SAN.MC - news) .

This account is paying 2.96 percent and demands a minimum balance of £25,000 (the maximum is £1 million). You have to run the account online, but you get the flexibility to switch between monthly and quarterly income the quarterly rate is 2.97 percent. You can withdraw up to £5,000 a month without penalty: take out more than this and you lose 60 days interest. Alliance & Leicester International is based in the Isle of Man so you are protected by the islands depositor protection scheme.

Alliance & Leicester also offers the second best rate for monthly income seekers, the 2.72 percent it pays on its Select Income International Issue 1. Its very similar to the eSaver account, but you can run it by telephone and post (as well as online if you wish) and you cant opt for quarterly interest payments.

The only other offshore bank that competes with Alliance & Leicester on rates for monthly income is Bradford & Bingley International also part of the Santander Group. It is offering 2.72 percent on its Global Saver account which demands a minimum deposit of just £5,000 and 60 days notice for withdrawals.

Contrast these rates with those paid by some of the other offshore banks. While Nationwide International, owned by the UKs largest building society, does pay 1.85 percent on monthly income on its Base Rate Tracker Premium account, on its 60 Day Notice account the rate is just 0.25 percent up to £49,999 and then 0.3 percent. So, if you had £100,000 invested then over a year youd accumulate £300: or £25 a month.

And its not alone. More than 20 offshore banks pay less than 0.5 percent interest on monthly income savings accounts. If youre with one of them, then it makes sense to switch now or youll be seriously out of pocket.

Source: The Telegraph/Yahoo

Like 0


Leave a comment

You don't have to be registered to leave a comment but it's quicker and easier if you are (and you also can get notified by email when others comment on the post). Please Sign In or Register now.

Name *
Spam protection: 
Your comment * (HTML not allowed)
(Items marked * are required)


This site uses cookies. By continuing to browse you are agreeing to our use of cookies. More information here. x