HSBC turkey - 18% rate

karenrobinson_3

We have been told by a firend that HSBC in Turkey are offering 18% on their savings account. Has anyone heard of this? Can this possibly be true? If it is, what pitfalls/tax obligations should we all be watching out for?

purch

Well the first pitfall is that it's gonna be in Turkish Lira, and the reason the interest rate is so high is that the currency is much more volatile than Sterling and other major currencies, and your Investment is more likely to lose value against these currencies which offer lower Interest rates, over the term of the investment.

Aegis

What's the inflation rate in Turkey at the moment, and therefore how is their currency holding up against ours? You might find that after accounting for both of these factors, you're actually earning less than in a high interest account here.

Essentially the pitfalls are that you put your money at the mercy of foreign exchange markets, which can make or break you in very short order.

DeepSporran

The CPI inflation rate in Turkey last year was 9.7% (compared to around 2.5 to 3% I think in the UK) and it appears that it's rising if anything.So you need a big fat interest rate to compensate for that sort of risk.

http://www.turkisheconomy.org.uk/news.htm

Jonbvn

I worked in Tukey nearly 10 years ago, when there were zillions of Turkish Lira to the pound/dollar. At that time local staff used to get 20% pay rises every six months, solely based on the drop in the Turkish Lira against "hard" currencies.

I would assume that since they are looking to enter the EU, their currency and/or inflation is under better control.

I would guess you would need to be a resident in Turkey to open a savings account, similar to the UK.

Overall a very high risk strategy.

[Deleted User]

Dont bother playing with monopoly money, buy gold coins!

kitchen_buff

Have not heard this, but HSBC have just put up the interest rate on its commercial credit card from 15.9apr to 17.9apr