Guide to Offshore Banking in 2010

2010 is set to be significant year for the respective banking industries of many countries around the world. In the UK customers look set to find the best savings deals, and banks are predicted to make moves to re-establish trust with savers more eager to switch to new accounts and new providers. So how is the offshore banking sector likely to change?

For savers in the UK, the Bank of England base rate looks likely to remain at the historically low 0.5 percent for a good few months yet, with some even predicting that it’ll stick around for the entire year. Consequently, more and more savers looking to get the most from their savings may be enticed by offshore interest rates which are proving to be higher.

Yet it is not just promising rates which looks to benefit the offshore sector, 2010 is also seeing something of a new era of transparency demanded of those with offshore accounts. HM Revenue & Customs have called for offshore savers to notify them of their offshore accounts if they have not already done so in order to cut down on the number of UK residents expected to be using offshore accounts to evade tax illegally.

Those who have not notified the HMRC by 4th January now face the risk of investigation and penalties up to 100 percent – whilst those who have notified have until the 12th March to pay back any tax owed.

However, this new era of transparency is causing many offshore financial centres to make significant changes also. In order to ensure that certain countries are honest with their tax practices, in 2008 the Organisation for Economic Co-operation and Development (OECD) drew up a blacklist of potentially harmful havens. The most recent to leave the blacklist is Antigua in the Caribbean which now joins both onshore centres such as the US and UK, as well as other offshore centres.

In order to move from the OECD blacklist to the white list, financial centres need to be signed off from twelve members in order to be assured its practices are up to the standards of the organisations. Antigua’s move will be a positive sign for neighbouring centres such as Anguilla and the Bahamas to follow suit – while fewer countries hold on to the notion that policies on tax are merely a matter of sovereign entitlement.

Top Offshore Savings Rates - October 2009

Best rate at the time of writing for sterling balances in offshore banks comes from Halifax International, paying 3% for £2,500 or more deposited, with instant access.

If you have £10,000 to salt away for five years and make no withdrawals, Clydesdale Bank International offers 5.1% a year.

Anglo Irish Bank has the best rates for euros and dollars. 5,000 euros deposited pays 2.25%, with instant access; $5,000 on 90 days' notice pays 1.6%

The rates shown (c) are gross, i.e. with no tax deducted at source, and are ranked by the amount of notice of withdrawal (A) one has to give the bank without applying an interest penalty (or for the length of term, for fixed-rate accounts), and by the minimum ammount (B) left on deposit to qualify for that level of interest. Rates collated on 2 August are are subject to change. Rates on the no-notice and notice accounts are variable; those on fixed rate accoutns apply throughout the term shown.

Source: Moneyfacts

Bank	A	B	C
Sterling No Notice Accounts
Halifax International	None	£2,500	3.00%
Anglo Irish Bank Corp (Intl)	None	£5,000	2.80%
Alliance and Leicester (Intl)	None	£15,000	2.76%
Bradford and Bingley (Intl)	None	£1,000	2.50%
Sterling Notice Accounts
Alliance and Leicester (Intl)	50 Day	£25,000	3.00%
Alliance & Leicester (Intl)	60 Day	£25,000	2.97%
Anglo Irish Bank Corp (Intl)	30 Day	£5,000	2.75%
Bradford & Bingley (Intl)	60 Day	£5,000	2.75%
Sterling Fixed Rate Accounts
Clydesdale Bank International	5 Year	£10,000	5.10%
Clydesdale Bank International	3 Year	£10,000	4.25%
Halifax International	3 Year	£1,000	4.00%
Northern Rock (Guernsey)	01.08.12	£10,000	4.00%
Euro Accounts
Anglo Irish Bank Corp (Intl)	None	€5,000	2.25%
Irish Permanent (Intl)	30 Day	€10,000	2.25%
Anglo Irish Bank Corp (Intl)	90 Day	€5,000	2.00%
Skipton (Guernsey)	None	€25,000	1.75%
US Dollar Accounts
Anglo Irish Bank Corp (Intl)	90 Day	$5,000	1.60%
Investec Bank (Channel Islands)	90 Day	$50,000	1.60%
Anglo Irish Bank Corp (Intl)	None	$5,000	1.50%
Irish Permanent (Intl)	30 Day	$10,000	1.50%

Two new guaranteed bonds have benn issued by Britannia International. A six-year offer pays a fixed return of 5% for each year when FTSE 100 index of UK shares does not fall below 75% of its start value in October.

A three-year version pays 11% if the level of the FTSE index is equal or greater than the start value over the life of the bond. Intial captial, minimum £5,000, is guaranteed to be returned at the end of the term.

Guernsey - Offshore Banking Centre 2009

Despite their reputation ten, maybe twenty years ago, stringent rules and the emergence of the Organisation for Economic Co-operation and Development means offshore banks are now considered an accessible and viable option for savers whether they are expats or not. For those looking for the best savings accounts in Europe, offshore finance has long been connected to areas such as the Isle of Man and Switzerland - but more recently, Guernsey has also established itself as a contender.

While the financial sector may not yet contribute to the Guernsey economy as much as it does in Switzerland and on the Isle of Man, banks have been beneficial to the development of the Channel Islands since the 60s. Today there are around 55 banks on the island, due as much to its desirable and convenient location, as its low taxes - a statistic that is all the more impressive when one considers its size of 25 square miles. That's an average of more than two banks per mile.

Short Guide to Offshore Banking in 2009

As we continue through recessionary times, 2009 seems a very unlikely year for many of us to consider depositing our savings into an offshore bank account. However, with speculations abound that a brighter financial future may already be in sight, offshore financial centres are earning a cleaner reputation than they ever have done - and deservedly so. With the continued work of the OECD and other developments in the sector, offshore banking could be argued to be more necessary today than it ever has been.

The OECD (or to give it its full title: The Organisation for Economic Co-operation and Development) is made up of a 30 country membership including the UK, the US and more recently South Korea and Slovakia. Amongst other things, the organisation seeks to maintain financial stability, to coordinate domestic and international policies, and to contribute to growth in world trade.

Isle of Man Economy Set to Improve by the End of 2009

As around 700 students collect their A-Level results on the Isle of Man, many will be considering their next step - either to apply for university on the mainland or to remain on the island and look for a job. Although the recession is not drawing many youngsters to the prospect of looking for work in the UK, recent developments within the unique Manx economy is causing some commentators to speak quite optimistically about the coming year.

Of course much of the Isle of Man economy is centred around its financial sector, and its offshore interest rates and savings accounts are some of the best to be found in Europe. Its establishment as a major financial centre is due to the island's government proposed incentive to bring business to the island via lower taxes, a proposition that has continued from the mid-sixties to this day.