new zealand banks

lozzer

Hi,
A friend of mine said he was going to put money into a kiwi savings account giving over 8% interest.
I have looked and seen these rates but cannot work out if you have to live there.
It's a bit far to move for an extra 1%
Anyone any experience?
thanks

Milarky

...assuming this isn't a sterling account you can open in London....

The higher savings rates offered in other countries tend to reflect higher domestic costs (inflation) than elsewhere (Iceland being a 'prime' example.)

You have to convert your savings into the local currency and there is a risk that the currency will fall anyway.

(Bad idea)

Jonbvn

There have been several threads about high interest rates in foreign bank accounts. The last one I recall was on Turkish banks offering 13%.

Assuming you live in the UK and get paid in sterling generally foreign savings accounts are a poor idea for several reasons:

1. A lot of banks require that you reside the country in order to open an account. The UK does this.
2. There is a big currency risk. Currencies are generarlly quite volatile. Have you noticed the US$ recently?
3. The FX rates will generally be at tourist rates, unless you are exchanging large sums.

Of course, in the case where you have income in a particular currency, it may be worth considering having a savings account in the same currency.
As an example, say you owned an overseas property, which you rented out for some of the year. You could hold the rental income in the country where the property is located, and use it to live on when you are using the property.

lozzer

Thanks guys,
That makes good sense.