where can I invest my euros

sims123

hi has anyone got any ideas where I can invest my euros. I exchanged a large amount of sterling last year when the euro was low at 1.16 with the intention of purchasing a property in Spain. However due to ill health I changed my mind now as the euro had gone back up I don't want to change it back due took loosing around 3 grand. meanwhile I'm stuck with a measly 0.5 % interest in Lloyd offshore.
any thoughts greatly appreciated

bowlhead99

You can "invest" the euros in all kinds of places -from properties or shares or investment funds, to cash accounts.

The eurozone interest rates for cash are very low, so half a percent for instant access is not terrible. The European central bank may be encouraged to lower interest rates in the Eurozone even further, given that price inflation there is generally very low too. You might be able to get another one percent on top if you're willing to lock it away for a longer term and are happy not able to get it back whenever you want it.

However, over the next year you might gain or lose 10% in sterling terms, so a percent here or there is scant consolation if you lose yet another £5k over the next year and end up buying back sterling at an even worse rate because you don't actually have any use for the euros any more.

So my question is, what is the purpose of continuing to hold your Euros now you don't want a property. Are you planning to have lots of holidays in the Eurozone to use them up?

From the amount you are talking about losing (£3k while the rate moved from 1.16 to 1.23) I'm guessing you have (or had, before the rate worsened)about £50k. You say you don't want to change it back due to losing 3 grand. But it is too late. You have already lost 3 grand. The contents of your Euro account are worth 3 grand less than you paid for them. If you continue to hold them, they may drop further.

When the exchange rate moves to 1.4, you will have lost 9 grand instead of 3. Will you take that loss, or keep your head in the sand until the rate is 1.5 and you've lost 11 grand? In the context of all that, a percent or so on the interest rate is largely irrelevant.

So, if you are asking how to invest the Euros, you need to give some indication what the purpose of the "investment" really is.

Some people on this forum will have tens of thousands of pounds invested in investment funds which buy shares in European companies, and are using them alongside other funds which invest in other worldwide companies as part of planning for retirement or later life. Very few people would simply be holding a stack of Euro cash if they did not live there and were not planning on buying Euro assets with it any time soon.

sims123

thanks I was thinking more in terms of the best interest I could get at the moment I use euros a lot for holidays so could use it over the next few years just wondered if there was any better savings rates about rather than just cashing it back in to sterling. I could lock some away for a year no
problem

bowlhead99

It's a struggle to get access to good rates for Euros if you're not a resident of a Eurozone country. Most of them don't take new customers from beyond their borders.

Nationwide International has an offshore savings account doing 0.75% (although like your Lloyds that will include a bonus element the first year) http://www.nationwideinternational.com/interestrates/euro.htm

A few to check here in the UK, which do fixed deposits in Eur - but don't show the Eur rates on the website, you'd have to call them - would be:

http://www.investec.co.uk/products-and-services/banking-services/personal-savings-accounts/fixed-term-deposit-accounts.html

http://www.icicibank.co.uk/personal/branch-banking/savings-accounts/fixed-deposit-account.html

http://www.bankofbarodauk.com/retail-banking/deposit-products/fixed-deposits/

Coo_Den

Interesting perspective - thankyou - Could i ask a followup question please - I am in a similar position to the OP and I was wondering if anyone know of any investment houses where I could use my Euros to buy units in an investment fund of some sort - rather then to have to exchange them and lose a small amount on the cost of the currency transaction