Offshore savings best buy rates
Offshore sterling deposit roll up rates still above 2.6% for those prepared to look, says Offshoreonline.org
Collective Redemption Bonds are one of the best kept secrets of the offshore savings world, offering as they do significant flexibility and gross roll up of incomes paid into them. Available via specialist brokers such as Offshoreonline.org, they are stripped down, wrapper accounts, into which you can place a wide range of investments, including cash deposits. Not all banks offer accounts that can be used with the bonds, so that is where your broker can help, sifting through the better deals. As an example, current rates available on sterling 12 month deposits are 2.6%, or for those who need currency accounts, US $ 1.4% and €1.3%, both over 12 months.
The big advantage of a Collective Redemption Bond for an offshore saver is that you can leave your funds in the bond and interest paid each year rolls up on a gross basis. This can be particularly useful for people nearing the end of a contract who may have to leave a low tax environment and go back to a higher tax jurisdiction, such as the UK, to look for work. Tim Harvey, managing director of Offshoreonline.org observes, “For an expatriate who has reached the end of a contract but who does not want to lose the advantages of offshore gross roll up of interest on deposits, these accounts can be ideal, as interest can be left to accrue, while you look for your next contract abroad.”
UK residents can use the bonds too and are allowed to draw down 5% of their initial capital deposited each year on a tax efficient basis. The minimum deposit required to open an account is £25,000, but they are generally more suited to deposits of £100,000 plus.