Save in the US or here?

LondonGuy25

My wife has $50000 in a savings bank in the US. We are now both living in the UK. She has joint US / British citizenship and has been living here almost 2 years now.

Her money is in an account where if the balance is over $50000, the interest is 4% (calculated daily). If this drops below $50000, the interest is 2%.

Given the cost of transferring money by wire, currency conversion etc, would you advise we start bringing this money over to the UK to put in savings here?

We could both get ISA's and put in £3600 each which would account for about $15000. Should we just bring over the same amount each year to fill our ISA's here? or bring over more and put in a normal savings account in the UK?

We're not sure what to do - when we looked at the statement of her US savings account, it said she was getting $140 interest per month on her $50000 which I worked out to be 3%, not 4. Am I calculating this wrong?

Thanks in advance

D

purch

Things to consider.

Where/when would you expect to spend/use these funds ?

If you are going to spend this money in the U.K. then a decision to move the money over here would be sensible, the time frame very much depends on your view of the exchange rate and potential future movements.

If you don't expect to need the money in the U.K. then the decision is either simpler, or more complicated depending on how you want to look at it.

You could either leave it where it is until you go back, or take a punt on the exchange rate and move it around as you see fit.

P.S. It's about 3 1/4 pc interest

tradetime

We're not sure what to do - when we looked at the statement of her US savings account, it said she was getting $140 interest per month on her $50000 which I worked out to be 3%, not 4. Am I calculating this wrong?

Yeah it's about 3.36%, if your are sure about the interest rate then you are probably paying some sort of tax that you must not be aware of, I'm not sure how savings are taxed in the US
As to the dilemma of moving or leaving it, I think Purch has pretty much summed up the considerations there. I personally think there will be a better time re the US/UK exchange rate to convert money from $ to £ but that's just the proverbial "bloke in the pub says......" speculation, nothing you, or I for that matter, would stake my life on.

Cook_County

As she is a US citizen she needs to pay US tax on the interest wherever it is; she is doubtless filing annual US tax returns reporting worldwide income.

Assuming she not domiciled within the UK, she will be liable to UK tax on interest accumulated over the last 2 years if she brings the money to the UK, whereas she may otherwise fall below the £2,000 a year de minimis limit...

In other words, don't forget the tax issues!