Savings account (UK) please help me,income,400.000,00

Paolo11

Hello,im new here, my question
i am moving to UK and in my first country in south america the GBP is very expensive 1gbp = 4BRL++tax
i have 400.000,000BRL in brazilian saving account it gives me R$2100 per month and converting to GBP is 500pounds
should i keep my money here and earn 500pounds per month easily or put my money (converted = 100hundred thousand pounds) in UK bank ?? how much can i earn % in saving account in uk ??
sorry my limited english !!
hope you help me
thank you very much
: )

Your_Hero

Paolo11 wrote: »

Hello,im new here, my question
i am moving to UK and in my first country in south america the GBP is very expensive 1gbp = 4BRL++tax
i have 400.000,000BRL in brazilian saving account it gives me R$2100 per month and converting to GBP is 500pounds
should i keep my money here and earn 500pounds per month easily or put my money (converted = 100hundred thousand pounds) in UK bank ?? how much can i earn % in saving account in uk ??
sorry my limited english !!
hope you help me
thank you very much
: )

Thats over 6% interest. UK has no where near that for that amount. Keep it there.

planteria

yes, 3-4-5% is the very best you would be able to achieve here, and that would involve some work, exploiting accounts with relatively small amounts.
the exchange rate could change though, of course...if the pound does well against the real, you could finish up having fewer pounds to spend

bowlhead99

Your_Hero wrote: »

Thats over 6% interest. UK has no where near that for that amount. Keep it there.

But the 'big picture' that Paolo11 needs to see, is the fact that the BRL/GBP rate will change over time.

In Brazil, the official base interest rate (the selic) is 10 or 11 %. Over here, our official base interest rate is 0.5%. If the best thing to do was for everyone to put money in a Brazil account for the high interest rate, we would all borrow in UK and save in Brazil and make a profit. But that is not a very safe thing to do.

1.5 years ago, the BRL/GBP rate was only 3.0. Today it is more like 3.8. So if you had BRL 360,000 in March 2013, and you earned a lot of interest on it, you might now have 400,000 today. But the 360,000 back then would buy GBP 133,000. If you had saved that in a UK bank it would not have increased very much, maybe to 135,000. Today, 400,000 might only buy 100,000-110,000. So you are getting a nice big interest rate in Brazil but you have lost on exchange rate. And overall you are down.

So, the GBP 500 per month will probably reduce. But also the big capital amount will also reduce.

It is difficult to predict what will happen to exchange rates over time. If you look back to the summer of 2004, 10 years ago, the BRL/GBP rate was over 5.0 and that could happen again in the coming years. So in GBP terms, you would lose 20% on the whole 400,000 which is worse than the benefit you would get from earning 6% in the Brazil saving account.

The banks in Brazil need to pay those big rates because the inflation rate is over 6% there - you need to make a lot of BRL per month just to stand still. Inflation rate here is much lower.

jamesd

Bowlhead99 is correct. What you should do depends on where you will be living long term. If that is UK, convert to Pounds. If it is Brasil, leave the money there. The big issue is exchange rate risk, not interest rates.

It's easy enough to make 6-10% here from investments with far lower investment risk levels than the exchange rate risk. Peer to peer lending. Safe compared to exchange rates. Whether that is appropriate depends on when you will need the money. Many allow selling some or most of the investment to get out early but there are usually limits to how much can be taken out. Most likely up to about 90% can be taken out, because of restrictions on taking out money for defaulted or late loans or similar issues.

atush

I think that Brazil has currency restrictions and not sure they would let him transfer all of it to the UK.

Or if they did, what sort of fee they would charge him. Pretty sure I read on TA there is a 6% charge to use a CC or debit card in the USA.

benalder284

Agree with the earlier comments that the biggest issue is likely to be exchange rate risk as even 'normal' movements in exchange rates could easily wipe out any interest rate gains.

The main issue which should determine what to do is likely to be where your long-term and future need for the money is likely to be (Brazil or the UK). Wherever that is is where I'd keep it.

atush

The exchange of that sort of money will lose far more being pried from the Brazilian banks that the moves of currency over the short term.

They really need to check this asap, as this needs to be sorted before any ideas of moving it.

Then longer term, where will you live? UK or brazil? If brazil- leave it there. save future income in GBP.

Onawingandaprayer

What's the betting that we never hear anything more from the op...