Expat rates: more choice, but only for onshore savers





Later this week, the top fixed rates on offer onshore will be withdrawn from sale. National Savings & Investment’s pensioner bonds, which pay 2.8pc fixed for one year and 4pc for three years, are only for the over 65s. They are being withdrawn from sale on May 15 and haveunsurprisingly proved very popular with older UK savers.

But even after the withdrawal of these bonds, onshore fixed rates are still better than those comparable offshore accounts open to expats. Currently the best three-year fixed-rate offshore is Skipton International’s 2.2pc on a minimum £10,000, maturing on July 31 ( Onshore, there are about six three-year fixed-rate deals better than the Skipton’s starting from 2.5pc offered by Paragon Bank. And the Skipton International three-year deal is much better than the next best on the market – Nationwide International’s 1.85pc.

With five-year fixed-rate deals – which probably are of limited interest if you expect base rate to start rising at some time in the next couple of years – there is only one competitive offshore deal, Permanent Bank International’s 1.64pc ( Onshore, there are at least seven deals better than that starting from 3.1pc from Secure Trust.

For two years, there’s also a big gap with the top offshore rate being Permanent Bank International’s 1.69pc. Onshore you can get 2.3pc and there are again around 20 providers beating the comparable offshore rate. There are a similar number of onshore providers which can beat the top one-year fixed rate available offshore – Nationwide International’s 1.45pc ( The top deal (after the withdrawal of the one-year NS&I bond) is Firstsave’s 1.9pc.

Onshore, what’s helping the supply of fixed-rate deals is lesser-known banks keen to pick up savers’ money. Firstsave, for example, is owned by First National Bank of Nigeria. Paragon Bank is a FTSE 250-listed UK company but it’s only been offering savings accounts to UK savers since last year. Secure Trust is a long-established UK bank and a subsidiary of the Arbuthnot Group. Other banks now in the onshore top rate tables include those with Qatari and Indian parents as well as UK-owned banks new to the savings market.

Offshore, there is sadly no sign of any willing newcomers wanting to pick up savers’ money: there are fewer than 10 providers actively competing for expat savers’ money and really only half of them are involved in the fixed rate market. And another one is restructuring – although this should make little difference to savers.

Santander Private Banking is currently a subsidiary of Santander UK but from June 1, it will be transferred to the Jersey branch of Santander UK. This will not have any effect on Santander Private Bank savings customers – the name will be retained and there will be no changes to interest rates. It is part of a restructuring by Santander UK – it did the same when it moved Alliance & Leicester International customers to its Isle of Man branch.

And at the start of this month, Santander Private Banking and Santander’s Isle of Man branch cut rates on their one- and two-year fixed-rate deals, making them out of kilter with the top current deals. Their rates are now 0.1 of a point lower at 0.9-1pc fixed for one year or 1.15-1.25pc fixed for two years. The lower rates are on deposits of £500-199,999 at Santander’s Isle of Man branch ( or £50,000-199,999 at Santander Private Banking (

• Sales of offshore-domiciled funds were £446 million in March, according to the most recent figures from the Investment Association, which represents the collective investment industry – higher than the previous month but still below the comparable figure for March 2014 of £500m. Net retail sales of all types of funds were £1.1 billion in March, less than half that of March 2014.

• Lloyds Banking Group has sold offshore life insurer Clerical Medical International Insurance Company to the Isle of Man-based RL360º. The sale comes after Lloyds decided to close the firm to new business so it could concentrate on its core UK businesses. Clerical Medical International was a pioneer in international life insurance but is closed to new customers. RL360º specialises in the sale of offshore bonds, which offer expats a way to hold investments tax-efficiently. There are around 24,000 policies which will transfer to RL360º






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