Opening an Icelandic bank account.

s4lvatore

Ok guys I know this is gonna sound silly, but after seeing how high the interest rates currently are in Iceland I was wodering does anyone know if it is possible to open a sterling icelandic bank account and take advantage of some decent rates.

I am gonna have a thourough look now online but as tis forum is "the place to ask" I thought I would.

Many thanks guys.

withnell

Icelandic inflation is very high, but that doesn't mean that sterling account rates match the figure, only accounts in the home currency. Bit like Euro interest rates are different from USD are different from GBP in British banks.

fanheater

interesting post. you'd have to convert sterling into krone to take advantage of the interest rate, so you'd be vulnerable to further depreciation of the krone. I couldn't find any graphs of its movements against sterling recently, though suffice to say it has certainly crashed.

it might be that the base rate in iceland reflects the fall in the value of the krone and no more, meaning you wouldn't gain anything.

there's no guarantee that the krone will continue to depreciate of either. the pound remains vulnerable due to the money printing etc going on at present, which will presumably lead to (higher) inflation and therefore higher interest rates in britain. this can be balanced by the point that buying sterling back when it is weaker would make you some profit.

there are two other things to think about. one is that iceland has since the crash last year applied capital controls, restricting the flows of money in and out of the country. this could shaft you if they did it again at the wrong time.

finally, I hope it doens't happen but there's a good chance the krone disappears althogether fairly soon and iceland joins the Euro.

gozomark

fanheater - OP is taking about £ account not krone

fanheater

so he is, which is why I said;

you'd have to convert sterling into krone to take advantage of the interest rate

jimbow25

My friend has lived in Iceland for the past couple of years - he said to open a bank account over there you need an Icelandic social security number which you can reigster for during a visit there, you don't have to have any intention to live or work there. I'm not sure you can do this online / by phone from the UK.

He was thinking of Krona accounts in any case (which had rates of 13% or so a year ago I'm not sure how current rates compare) so I'm not sure what the situation is with Sterling accounts (can you still get one after Icesave and Kaupthing Edge closed down?)

agsnu

Also note that there are foreign currency restrictions in place, so even if you did manage to open a Krona deposit account, you'd have trouble converting it back into Sterling.

s4lvatore

No it would have to be sterling, at least until all the fluctuations/economy settles down.

I dont think I would be able to sleep if I had a Krona account.

agsnu

s4lvatore wrote: »

No it would have to be sterling, at least until all the fluctuations/economy settles down.

Yeah, but what makes you think an Icelandic bank is in a position to offer a reasonable interest rate on a Sterling deposit account? Even if they offered one, they wouldn't necessarily pay the same amount of interest - why would they want/need to?

Interest rates on USD accounts (there are some providers in this country, or e.g. in the channel islands) are less than Euro, are less than Sterling.

nilrem_2

TBH I am amazed that anyone would even consider placing their money in any Icelandic bank!:eek:
If they offered me a 50% interest rate and four week free holiday in Iceland I would not consider it!:D