Offshore options increasing
Offshore savings accounts are becoming more accessible to savers with less cash to stash, according to Moneyfacts.
Data from the financial comparison site has revealed some accounts accept minimum deposits of just £1,000 and rates can be just as competitive as onshore accounts. For example, Kaupthing Singer & Friedlander (IOM) offers a no-notice account at a rate of 6.65%, which requires a £1,000 deposit, while Alliance & Leicester International’s no-notice eSaver Offshore pays 6.3% on minimum deposits of £1,000.
Rachel Thrussell, head of savings at Moneyfacts, said investing offshore has become easily accessible to the mainstream public because many of the mainland UK banks now have offshore subsidiaries.
“The European Union Savings Directive, which came into effect in July 2005, means that details of any income received from offshore accounts is passed on to HMRC. However, it has always been possible to defer the payment of interest, which may be of benefit to some.
“Savers also need to be aware that in the unlikely event something goes wrong with the bank that they are investing in, they will be covered by the relevant compensation scheme.
“The amount of cover varies depending on where the company is based, but none are as comprehensive as the Financial Services Compensation Scheme that covers the UK. In fact, there is no depositor protection scheme in either Jersey or Guernsey.”