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Other Offshore Bank Accounts
Bank and Building Society Accounts

OFFSHORE BANK

Fixed Term Account

(Also called Fixed Rate Bonds, Term Deposit Account, Fixed Term Deposits)

Lump sum invested usually at a fixed rate of interest for a fixed term of 6 months or 1 to 5 years. Early withdrawals can sometimes be made, usually by losing interest on the amount withdrawn for the whole term or 3 or 4 months interest. Check the rate is actually fixed for the whole term before you invest.

Who can invest Anyone

How worthwhile With interest rates now at low levels, it may be best to hold off investing in these types of accounts as interest rates elsewhere may rise within the term. Certainly terms of more than a year might be unwise. Consider instead offshore instant access account. See also onshore term accounts for alternatives. Terms over 5 years not recommended.

Minimum £500, £3,000, £5,000, £10,000.

Maximum Usually none.

Suitable Lump sums.

Money back At the end of the fixed term when the company usually notifies you. Some companies will return your money early if you have a good reason but may charge a penalty. If you die, investment plus full interest up to date is usually paid out.

Interest Usually fixed. With all companies, if interest is paid monthly, it is less than the yearly rate.

Interest paid Yearly or on maturity. By cheque, direct to a bank account, or left to accumulate. Not all companies pay all these ways. Monthly: into bank or other account see Bank and Building Society Monthly Income Account.

Tax Not deducted. Taxpayers are liable to pay income tax on the interest which should be declared on a tax return. Basic taxpayers pay 20% tax. Higher rate taxpayers pay 40%. See also new rules.

Fees to pay None.

Passbook None. Statement usually sent yearly.

Children Unsuitable.

Risk Full value of original investment returned on withdrawal. Some building society subsidiaries have arranged for the parent UK building society to give an irrevocable and binding undertaking to discharge financial obligations of the subsidiary. This undertaking may or may not continue once the building society has converted to a bank. Check before you invest that yours does. Stay clear of banks you have never heard of unless they are wholly owned by an institution of substance. Isle of Man: 75% compensation scheme on the first £20,000 for each investor. The security of the bank may be more important than the interest rate quoted.

How to invest Visit the web sites of the companies listed below.

Where from Best buys change and are usually issued as a limited offer. Former building sociteies pay most. Best rates at for £ sterling deposits: click here if you are on-line. Banks offering US$ and Euro € accounts usually pay poor interest although currently Euro rates are better than usual, see Where from at Offshore Bank Foreign Currency Cheque or Debit Card Account.

Other Offshore Bank Accounts
Other Bank and Building Society Accounts

Last updated 2 September 2008.