Silly questions about foreign bank accounts

Smart_FX

I think that apart from the exchange rate fluctuations it comes down to attitude to risk.

If you were meant to speculate with the currencies, I wouldn't lock money in the saving account for one year - far too long.

In case you see FX market moving against you after 1 month there is no chance to pull your money out quickly.

sabretoothtigger

If you know your going on holiday to iceland in a years time, any reason not to put 1000 over there and get a nice interest in the meantime?

I guess the bet would be that the interest would be greater then any potential movement in the pounds favour meantime

climbgirl

As well as the exchange rate risk, you'll also find it's not always possible to open a bank account unless you're resident in or a citizen of the country in question. For example, you can't hold an ISA in the UK without being a UK resident, my friend recently got slapped for this when he moved to another country and was still contributing to the ISA he had when he lived here.

newsaver2008

you are right climbgirl. I have a bank account here in Turkey now but I am a resident. And....the rates here are dropping fast too. I expect nearly everywhere will be affected by the global crisis.

tuggy12

themoffster wrote: »

could you explain it in Lehman's terms please?

Best Freudian slip I've seen in a while.

soulsaver

tuggy12 wrote: »

Best Freudian slip I've seen in a while.

Good...
Nowhere near as good as:
'...between Iraq and a hard place...'

soulsaver

Probably not worth putting money in Icelandic bank to get their high interest even if you going on hols there... exchange rate PLUS inflation is wiping out the value of the currency quicker than the interest rate being accrued..

sabretoothtigger

Inflation differences is something reflected in the exchange rate right, 18% just seems hard to beat especially when our interest rates are only low for fake reasons

agsnu

Read this:

http://www.moneyweek.com/investments/the-carry-trade-a-tsunami-in-the-making.aspx
http://www.moneyweek.com/investments/why-is-the-carry-trade-so-dangerous.aspx