Holding Foreign Exchange as savings

pjbltd

I have read it is good to hold a certain amount of your savings in a reputable foreign currency and I wanted to get people's advice on how best to do this.

Can I open such account at a British Account?

If so what interest can I expect to get?

Would it be better to open it in a foreign bank e.g. a Euro account in an Irish Bank?

What safety would I have on my savings if I did this under UK, European or International Law (if there is any!)?

I am assuming you cannot hold foreign currency in an ISA, or am I wrong and this counts as an asset you can wrap into an ISA?

What would be the least costly way to convert a few thousand pounds into a foreign currency?

I am looking to open either a Euro, US Dollar or Yen account.

In advance, thanks for the help!

jon3001

You could check out these providers:
http://www.bankofscotland-international.com/euro-accounts/home.asp
http://www.citibank.co.uk/personal/banking/international/deposits.htm?merchant=citi

Biggles

I don't know where you read that, but most advice is normally to avoid foreign currencies as all it does is expose you to foreign exchange risk.

Plus the two main problems: first that you will, effectively, forfeit the first and last year's interest in conversion costs; and second, I believe, that interest rates are currently lower in the Euro and USD areas (don't know about the Yen).

jon3001

Biggles wrote: »

I don't know where you read that, but most advice is normally to avoid foreign currencies as all it does is expose you to foreign exchange risk.

Plus the two main problems: first that you will, effectively, forfeit the first and last year's interest in conversion costs; and second, I believe, that interest rates are currently lower in the Euro and USD areas (don't know about the Yen).

The main motivation for some has been the weak pound. Sterling has lost nearly 20% against major reserve currencies such as EUR, CHF, JPY over the last 6-8 months.

If you want a good reason why high interest isn't everything then take a look at the Turkish Lira.