Saving in a Turksih Bank account?

chodges84

Hi,

has anyone had any experiance saving in a Turkish bank account?

They are paying out some VERY high interest rates and UK citizens can open an account.

Savings do have to be made in Turkish Lira, but I don't see this to be too much of a problem.

Currently banks over their will pay out 15% annually for amounts over 20,000 Lira, which works out to about £7000. I currently have a large sum of money sitting in a Savings account over here and am receieving 5% with the Halifax. (4% after tax). i will probably be in the 40% band of income tax when I fill out my tax return, so my net interest rate will come dwown again.

Does anyone have any experience doing this?

A person in my hop mentioned it today and after researching, Interest rates of that level seem to be the norm over there. I would obviously do it through a big bank.

ANy advioce would be very much appreciated.

the bank I had in mind is this one: http://www.ziraat.com.tr/ They also have an office in the UK.

Thanks,
Craig

tom188

Any gains that you make will be dwarfed by the volatility of the currency if it moves the wrong way and long term the exchange rate will adjust to take into account the different interest rates. I suggest you look at a historic chart of turkish lira vs sterling to see what I mean. If you were to do this it is a gamble, not a savings strategy.

Dazza.mk_2

By the theory of Interest Rate Parity any gains you've made on the higher interest rates you've already lost on the exchange rate


http://en.wikipedia.org/wiki/Interest_rate_parity

(theoretically of course!)