Luxemburg bank euro account pays 6%

autopetfeeder

I just came accross this http://www.advanziakonto.com/en/index.php
whilst looking for an account in Euro to hedge against further UKP drops.

Is it too good to be true? Are there even better rates out there from other European based banks?

Is it more risky than putting your hard-earned cash into a UK based bank? I presume there is no equivalent to the FSCS with this product?

Given that UK based savings accounts are not paying huge amounts of interest and UK banks offering offshore euro account are paying dismal rates, this is not a bad deal?

Any thoughts most welcome....:beer:

soulsaver

Try a search on here for advanzia and you'll see some previous discussion...

Sillychuckie

There are far easier methods of hedging against a drop in the £ relative to the € than opening a € account and transferring cash across...
Sounds risky too, what with compensation schemes and banks going under.

Just look at whether a spread betting site might be more suited...
Either short sell the GBPEUR rate (so as £ depreciates, you make money by being able to buy it back at a lower price), or look at longer dated FX options.
Options are probably best if you are looking at long term, because trading the FX, even with a low bet can, with gearing, leave you exposed to a large amount. Read up about it some more... I tend to use www.igindex.co.uk , but there are many others.

You can hedge your £ in a much more manageable environment and it would be less hassle than opening an account, changing a large amount of £ into euros, and putting them into a euro account (not to mention a damn sight cheaper too). The comission (or bid/offer spread) would be much less than your FX conversion fees if you converted real cash.
SC.

autopetfeeder

THanks for the replies. Have no searched a bit more - sorry I didn't do that to start with.

Regards spread betting, by going down the route would I not be betting that the spread betting company doesn't go bankrupt? Even in the currently climate, I would have thought the chances of losing money in a EU bank is lower than that of a UK finance company going belly up?

arcadia00

autopetfeeder wrote: »

THanks for the replies. Have no searched a bit more - sorry I didn't do that to start with.

Regards spread betting, by going down the route would I not be betting that the spread betting company doesn't go bankrupt? Even in the currently climate, I would have thought the chances of losing money in a EU bank is lower than that of a UK finance company going belly up?

With a regular account you only deposit a percentage of your total exposure to them and they are FSA regulated so the FSCS would be a back stop.

agsnu

arcadia00 wrote: »

With a regular account you only deposit a percentage of your total exposure to them and they are FSA regulated so the FSCS would be a back stop.

FSCS doesn't cover spread betting I thought, only CFDs. Perhaps it covers any cash in your account, but not any open positions?