HK Resident/UK National- Where should I save my money?

JojoH

Hi all,

Looking for some advice on savings & investments.

I currently live in Hong Kong SAR having been working here for 2 years.
As I currently have money in both U.K and HK Bank Accounts, I wanted some advice on how to streamline my finances to make sure I'm getting the best value.
Please see a summary below.
Any help would be greatly appreciated.

I intend to save approx $6500 HKD (£641) per month going forward to contribute to savings.

Hong Kong Finances
HKD $55706 (£5496) Savings Account
HKD $113794 (£11228) MPF (The Mandatory Provident Fund, often abbreviated as MPF, is a compulsory saving scheme for the retirement of residents in Hong Kong. I'm unable to withdraw from this unless I officially leave Hong Kong)
HKD $31000 (£3058) Invested in a house deposit (Hopefully will get this all back upon leaving the tenancy)

U.K Finances
£1063 Current
£5793 Savings
£1580 Help To Buy I.S.A

Thanks

eskbanker

If your aim is to get the best value then you'll need to add details of interest rates to your account list!

Having said that, your options for opening new UK accounts, while not resident here, are likely to be limited (do your existing providers know where you actually live?) and few here will be familiar with best buys in Hong Kong, so chances are that guidance can't be much more specific than the self-evident 'put your money in the (existing) account with the highest interest rate'! You certainly can't add to your HTB ISA while non-resident, for example....

Speculator

Hong Kong rates are around 0.01%. I am not kidding.

Also, with the HSBC HK$ savings account, you need to keep your balance above HK$ 5000 to earn 0.0010% interest.

If it drops below HKS5000, you get charged HK$50 per month.

A time deposit with HSBC HK earns you 0.25% for a 12 month fix!

Managed to close my HK HSBC a/c in the summer. When I am in HK, I now use my fee free Starling account.

HardCoreProgrammer

1.First of all, are you sure that the value in the MPF is correct?
You and your employer are required to contribute 5% of your salary, but this is capped at a salary of $30000 per month, so maximum contribution in 2 years is $30000 x (5% + 5%) x 12 x 2 = $72000. You have done very well to grow it into $113794 in 2 years.

2. If not "tax resident" in UK, you cannot pay new money into any cash ISA or investment platform (ISA or not), or open any saving account. You can add to your existing non ISA saving accounts, but with interest rates so low, HK or offshore are the only realistic options.

3. I do not know much about offshore investment companies, but I am aware that a lot of them are scams so be very careful.

4a. For investments in HK, you can open share dealing accounts with your bank or one of the many stock brokerage firms (which tend to have lower charges). For example, I have an account with investments in 2800.HK, which works like a tracker fund for the Heng Seng index.

4b. Have you considered making volunteer contributions to MPF? Since the current tax year, contributions up to $60000 can be tax exempt. Depending on your marginal tax rate, you can save up to 17% in tax.
Be aware that charges in MPF are much higher than UK pension funds (quite a few charge more than 2% per year, thanks to the HK government's dogmatic policy of "non intervention", which created a gravy train, sorry free market, for the management companies), so you should only do this if planning to leave HK in the next few years and take the money with you. If it stays in the MPF for the next 30 years, say, then any tax saving would probably be wiped out by the higher charges.