Getting 18% interest

stoddy56

Try though I might, I can't find any advice or explanation of whether I can put my money into an Icelandic bank like an Icelander would and get their very high savers interest ( I believe their interest rate is 18%).
Can an American or French person Invest money in an English bank?

lectureral

The reason it is not a good idea is because of currency fluctuations. Take the Swiss Franc - interest rates have been very low in Switzerland but a Swiss person who put money in a British bank account a year ago might have got a higher interest rate but would have lost about 20% when he came to buy back his Swiss francs again. Similarly for the French person who put money in a pound account over the last year.

Bromley86

To answer the second question, it'd be difficult without a UK address (hence why British expats got caught out with offshore accounts).

For the first, see:
http://en.wikipedia.org/wiki/Carry_trade#Currency

As the ISK is currently not floating (or at least not properly), that risk becomes insane. Although, that said, the "black market" rate and the official rate seem to be converging (which would be in your favour).

Anyway, the answer is "yes" (surprise, surprise - Iceland's regulations governing the setting up of a/cs are laxer than the UK's )

http://www.landsbanki.is/english/personal/faq/

Your new a/c even comes with a nice, shiny Icelandic government guarantee for 100%. You can trust us - we're the government .

Reaper

You would have to convert to the local currency to get that rate, and the Icelandic Krona is still diving. Indeed that is the very reason their interest rates are so high - to try to prop it up.

So the reality is you would not make 18% on your savings, you could even make a loss. Not really worth it considering the risk.

Bromley86

Is it diving? The free market rate seems to be appreciating in ISK's favour. Not that I'd buy any Krona if I was into currency trading - at least with red or black you know what your chances are.

Reaper

Before posting I had a look on Google Finance and it didn't look good.
http://finance.google.co.uk/finance?q=ISKGBP

Bromley86

There's something funny with that chart. With the exception of the blip on 1st November, it seems to show the official Icelandic rate at the daily auctions (or close to - I haven't checked to confirm that). i.e. ~165ISK to the euro.

Whereas the current price on the chart of 200 agrees with what I saw last night as the free market rate (and is, perhaps coincidentally, the ECB rate). That said, a lot of the free market rates you see are closer to 300, so who knows.

Anyway, none of that disagrees with your "doesn't look good" comment.

movilogo

Heard that some Turkish banks offer 20% interest. Whether you want to go ahead is your choice though

eeja

movilogo wrote: »

Heard that some Turkish banks offer 20% interest. Whether you want to go ahead is your choice though

Investing in Icelandic kroner for a meagre 18 % pa.
Why not go for a currency with a far far higher interest rate ?
How about Zimbabwe dollars ?
Interest rate surely over 10 million percent p.a at the moment .... that is if Robert Mugabe is still President when your Zim dollar 12 month deposit matures .

gunnaknow

eeja wrote: »

Investing in Icelandic kroner for a meagre 18 % pa.
Why not go for a currency with a far far higher interest rate ?
How about Zimbabwe dollars ?
Interest rate surely over 10 million percent p.a at the moment .... that is if Robert Mugabe is still President when your Zim dollar 12 month deposit matures .

Don't you mean inflation rates? The cost of goods soaring. Zimbabwe's annual rate of inflation is at around 231 million percent. It's interest rate is 8500%. Invest in Zimbabwe banks and you'll probably never see your money again.


"The root cause of the country's hyperinflation is the government's policy of printing ever more money to meet its own needs, which has the effect of destroying the Zimbabwe dollar's value in terms of hard currency, sending the cost of anything imported soaring."

thrupence

gunnaknow wrote: »

Don't you mean inflation rates? The cost of goods soaring. Zimbabwe's annual rate of inflation is at around 231 million percent. It's interest rate is 8500%. Invest in Zimbabwe banks and you'll probably never see your money again.


"The root cause of the country's hyperinflation is the government's policy of printing ever more money to meet its own needs, which has the effect of destroying the Zimbabwe dollar's value in terms of hard currency, sending the cost of anything imported soaring."

If you're in Zimbabwe, is this a good time to buy gold?