(I think) I Need to get £100K into Euros - Offshore/Forex???

greeneye

I have £95,000 that I wish to transfer to Portugal at some point in the next 9 months to purchase a property. And I will also be moving there myself.
But not likely to able to get a Portuguese bank account for some time.

Been hearing that sterling is likely to fall anything up to 12% against the euro in this period. I know this is all speculative but the there seems to be a general consensus amongst "the experts".
And I've decided to base my next moves on that assumption.

So with that in mind wondering if anyone has any advice on what I should do to minimise my losses during this period.


Thinking along the lines of:

1/ Using one of the Forex companies and locking a rate in with a 10% deposit and leaving the rest in a high interest UK sterling account.
Any recommendations for a Forex company (preferably one that isn't going to go bust in the next 9 months) and a UK high interest account (that I can get quick access to) very welcome.

I also may need to make more than one transfer as the Portuguese buying process works on the basis that you give a 10% - 30% deposit on agreement of a sale and the balance upon completion which could be anything up 3 months.

OR

2/ Putting the lot into an offshore Euro account (i.e Anglo Irish bank / Nationwide etc) but unsure if this makes sense with regards inital conversion costs and lower interest rates in a Euro account.
And when I do come to move the money to Portugal do I still use a Forex company or do I use the offshore bank I'm with (which could be expensive)?
If a Forex company I believe they work on the basis of converting sterling to euros, what happens if my money is already in euros?

Also a bit concerned that Nationwide/Anglo Irish are not FSA regulated so wondering what I would be covered for under Isle of Man financial regualtions if one of them went belly up?

And also not sure how you transfer the money from a UK bank to say an offshore Nationwide account (when setting up an account) do you use a Forex company?

OR

3/ Also been told that it's possible to hop on a plane and go to Ireland and open a euro account as a UK resident with a passport and utility bills. Is this true? And would I be any better served/protected by an Irish bank rather than an offshore bank.
Also what would be the best way to transfer from a UK to an Irish bank?

OR

4/ Something else I haven't even considered???


And if anyone can recommend a decent financial advisor in London area who specialises in this field and maybe has some knowledge of taxation in Portugal etc (but getting my money in euros is my pressing priority) be appreciated.

tawse57

Odd, I have been reading articles posted over on housepricecrash.co.uk that the Euro will probably tank later this year as the ECB comes under pressure to lower its interest rate. People are apparently talking about pressures in the Eurozone that could see the Euro fall apart.

I am no expert I hasten to add.

greeneye

tawse57 wrote: »

Odd, I have been reading articles posted over on housepricecrash.co.uk that the Euro will probably tank later this year as the ECB comes under pressure to lower its interest rate. People are apparently talking about pressures in the Eurozone that could see the Euro fall apart.

I am no expert I hasten to add.

I'm just going with experts on Channel 4 news , various BBC programmes , Mainstream press - got a link for the articles on that site can't seem to find any on there.

runciblespoon

I spoke to a broker at Foreign Currencies Direct at lunchtime who thought that the rate would bottom at about 1.15. Apparently lots of people who formerly had their cash in dollars as a safe currency are switching to Euro as it's more stable, and this is buoying the Euro. Also the European economy is in a large part determined by Germany who seem to be doing well at the moment, with not too many inflationary pressures looming.

I've been told that the rate difference between spot and forward options (ie do it today or book for N months time) is due to the difference in base rates. So if you can get say 1.75% above base for Sterling (ie 6.75%) and 0.5% above base for Euro (4.5%) then a forward option might work out. Do your sums based on the rates they quote.

If you do do a forward option, look at fixed rate deals. You know when you have to supply the balance and the money's committed, so unless you're going to have a cashflow problem lock it in a fixed rate until a week or two before the money is due. Some building societies (eg Norwich and Peterborough) do money market fixed rates for large sums (£50K+) - phone them up and they'll quote you a fixed rate for N days starting today only.

Forex companies are used to staged payments - you can get them to do automatic transfers by Direct Debit if that's what you want.

Anglo-Irish don't give accounts to UK residents.

Once your money is in Euros you just do a transfer from whichever bank it's currently in. Will cost £10-40, possibly a bit more if you need documentation to certify the money's arrival in Portugal (for mortgage companies or tax purposes). To transfer to IoM in sterling you either send by BACS or CHAPS. In Euro it'll be another £10-40 charge for a transfer.

To minimise charges, look for SEPA payments - new Europe-wide payments system coming in.

Isle of Man protection: 75% of first £20K or currency equivalent.

I don't know about the Ireland angle - would be interested to know.

runciblespoon

Done some Googling. This site suggests EU citizens who are non-residents can open accounts. But then it talks about the Irish pound, so might be out of date.

Here's Anglo-Irish (ireland)'s policy on non-resident accounts - needs 50,000 EUR/USD/GBP but otherwise looks OK.

Ireland's compensation scheme is 90% of first EUR20K. Better than IoM but not as much as UK.

Now to find a rate comparison site. MoneyGuideIreland is the best I could come up with - months out of date, but since base rates haven't changed it might give an idea. Max rate is about 5%, against about 4.5% in IoM (Anglo-Irish, Nationwide, Kaupthing).

greeneye

Just got in and got a very saw head - but will definitely be reading your posts in greater detail in the morning looks like good info...thank you.

runciblespoon

Asked the Ireland question in a new thread.

runciblespoon

One other thing I found out: Northern Rock Guernsey's Euro Direct Saver account is 4.3% for >EUR5K and has a 100% UK government guarantee (the same as Northern Rock UK). Note that normally Guernsey has no guarantee at all, so keep an eye open if NR's guarantee stops. Northern Rock Ireland is also guaranteed and does 5%, but they don't give accounts to non-residents.

Decent-paying Irish banks seem to be:
Anglo-Irish (need EUR50K)
Irish Nationwide BS fixed 5.1% for a year on >EUR20K
First Active: 4.33% instant access, 4.55% two year fix

I'd suggest working down the Moneyfish list and checking each bank by hand - MoneyFish's price comparison isn't good but it gives you an idea.