Best Banks for Expats 2013
By Iain Yule

For the ninth year in a row the Nexus magazine offshore bank best buy charts have been trawled to find out who has been offering the top rates of interest most consistently. In a low-interest rate environment generally it is especially important that expats find the top rates delivered regularly without being reduced when banks’ targets are reached. Loyalty to a bank should be rewarded and if it is not then you should move your account, writes Iain Yule.

The results of this search of the last 12 months’ ratings as they appeared in 2012’s editions of Nexus are shown in the table.

In each edition of Nexus we print a table of the best buys currently available in offshore banking. We do this to assist expats in determining where to place any money they want to save in a tax-free environment at the best rate of interest possible.

But these tables of top rates are not the only story. They give a good snapshot of the accounts paying the top rates there and then. But high headline rates and introductory special offers on accounts make choosing the right one difficult. How do you know if today’s top-paying account is going to continue with a high-rate policy?

Of greater significance to savers, especially those who are in it for the longer term, is consistency of high rates of interest, and that is much harder to identify.

So that is where our ‘Best Offshore Banks for Expats Awards’ can assist. We have examined the interest rates paid by offshoots of banks and building societies based in the ‘sterling offshore’ area, which includes the Isle of Man and the Channel Islands of Jersey and Guernsey.

We looked for consistency of approach, signified by the number of times each offshore bank appeared in the best buys list published in each edition of Nexus, derived from research by independent data supplier Moneyfacts.

Awards are made in the categories of sterling instant access, sterling notice, dollars and euros accounts. There is also an overall award to highlight those offshore banks which have most often featured as best buys in different categories.

With interest rates so low, it is all the more important for savers to look out for those savings account providers which consistently offer better rates than the norm.

Best Banks for Expats Awards 2013

The banks are ranked by the number of times their savings accounts appeared in the ‘best buy’ tables printed in the 11 issues of Nexus Expatriate News magazine during 2012 and at www.expatnetwork.co.uk. The banks appeared in the ‘best buy’ tables by virtue of having the best interest rate available at the time in the different categories of account (sterling notice, sterling instant access, dollar and euro) as judged by Moneyfacts. So we are showing which offshore banks offered the best interest rates most consistently during 2012. The ‘Overall’ award goes to the banks whose accounts have most often featured as best buys in different categories. Underlying interest rate comparisons by Moneyfacts (www.moneyfacts.co.uk).

Best Offshore Banks for Sterling Deposits: Instant Access

Joint winners in this category are Nationwide International and Lloyds TSB International, with both banks having savings accounts which appeared in the best buy charts throughout 2012. Nationwide’s Bonus Access Account seeks a minimum deposit of £25,000 and at that level currently pays 1.9% a year. Lloyds TSB’s International Bonus Saver account has a minimum deposit level of £5,000 and currently pays 1.56% annual interest.

Commended in this category is Alliance & Leicester International, which is owned by Santander. The bank appeared in the best buy charts almost throughout 2012 and is still in the charts with a Flexible Saver account which currently pays 1.5% interest on a minimum deposit of £5,000.

Best Offshore Banks for Sterling Deposits: Notice Accounts

Clear winner in this award is once again, Nationwide International. The Isle of Man based bank was an ever-present best buy in this category in 2012. Its Bonus 95 account currently offers 2.2% interest for deposits of £25,000 or more. Savers must give 95 days’ notice of withdrawals to maintain this interest rate.

Highly Commended in this category is Guernsey-based Skipton International. This offshoot of the UK building society currently has an account – International Select 80 – paying 2.15% interest for £100,000 or more held on 80 days’ notice of withdrawals.

Commended once again is Alliance & Leicester International, which appeared prominently as one of this category’s best buys for much of 2012.

Best Offshore Banks for Euro Deposits

Winner of the euro award is Isle of Man based Permanent Bank International, a rebranding of Irish Nationwide. The bank topped the charts throughout 2012 for euro rates and still does so. Its 35-day notice account currently pays 1.8% interest on deposits of €25,000 or more.

Three offshore banks are also commended in this category: Lloyds TSB International, currently paying 1% on €5,000 or more with instant access; Nationwide International, offering 1.75% for €25,000 or more and instant access; and Kleinwort Benson (Channel Islands), now paying 1.28% for €100,000 or more on 189 days’ notice.

Best Offshore Banks for Dollar Deposits

Clear winner once again in this award is Nationwide International. The bank’s US dollar Bonus Access account is currently paying 1.6% interest with instant access on deposits of $25,000 or more, and still tops the best buy charts.

Three other banks are commended in this category as they appeared equally as prominently in the charts. Alliance & Leicester International, Lloyds TSB International and Investec Bank (Channel Islands) all provided superior rates on dollar deposits during 2012. Still providing best buy rates are Lloyds TSB International, offering 1.51% and instant access on deposits of $5,000 or more; and Investec Bank, paying 0.9% for $50,000 or more held on 90 days’ notice of withdrawals.

Best Offshore Banks for Expats Overall

From the foregoing you can see that the clear Overall Winner is Nationwide International, offshore offshoot of the UK building society, winning three individual categories and commended in the other.

The bank has recently launched new issues of its sterling Bonus Access, Bonus 1+ and Bonus 95 accounts. Bonus Access issue 4 pays up to 1.9%, Bonus 1+ issue 3 pays up to 2.1%, and Bonus 95 issue 3 pays up to 2.2%.

Highly Commended Overall is Lloyds TSB International, prominently in two currency categories and joint winner for sterling instant access accounts.

To help expats easily calculate their foreign exchange requirements, and to encourage those who make regular transfers to consider providers with no transfer fees, Lloyds TSB International has recently launched an online international money transfer calculator.

The tool allows people to input their regular money transfers, which tells them how much currency they might need for overseas payments, and how much currency they could receive from overseas income. It highlights the benefits of fee-free money transfers.

Commended Overall is Alliance & Leicester International, which is commended in three award categories. The bank has appeared for many years in these awards and shows a consistency of approach. It also currently offers a two-year fixed rate bond paying 2.3% interest for an investment of £5,000 or more.

* All rates quoted as at 4 January 2013. Please check current rates with product providers.