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Expat rates: difficult times mean habits of savers are a-changing

3rd October 2011

Expatriate savers want certainty, and at the moment that means fixed rates, particularly short-term ones.

 

Playing it safe: savers are reluctant to lock up their savings for longer than a year 

 

Lloyds TSB Internationalsays it has seen a 20 per cent increase in demand for one-year fixed-rate deals just in the last three months. Over the last two years, its figures show that there has been a marked change in what expat savers want.

Lloyds TSB International’s managing director of expatriate banking, Tony Wilcox, said: “During 2010 we saw a higher demand for long-term fixed-rate deposits as customers looked to take advantage of good rates at a time when base rates seem unlikely to change soon.”

But earlier this year, Mr Wilcox says that savers switched their interest to easy-access accounts as there were expectations that base rates were going to rise. Sadly for savers, those hopes were unfounded – which is why there has now been the switch to short-term fixed rates.

Lloyds has put its short-term fixed rates up by 0.3 to 0.6 of a point. Its new one-year fixed rate is 3.1 per cent, up from 2.5 per cent, which makes it one of the best deals on the market. Its new two- and three-year fixed rates are 3.2 per cent and 3.3per cent respectively – previously, they were 2.6 per cent and 3 per cent.

Mr Wilcox added: “Lloyds TSB’s economists expect that theBank of Englandbase rate won’t rise till the third quarter of 2012, at the earliest.

 “So, providing expats don’t need access to a certain portion of their savings over this period, a good one-year fixed rate seems like an attractive option. By the time the account matures, it may have been a good time to consider their options, regardless of where they had been holding their money.”

Change of name for former Anglo Irish savers

AIB Internationalis a new name to the savings charts – but it’s not a new savings operation. It is now the name for Anglo Irish, which was taken over by AIB International in February.

Currently, the only change that savers will see is the name, but AIB International has promised new account launches in the near future. It will also soon be writing to customers about the changes.

AIB International’s Irish parent, originally called Allied Irish Bank, was created in 1966 from three long-established Irish banks. Following the Irish banking crisis, it was merged with building society EBS to create one of the republic’s two “pillar” banks (the other beingBank of Ireland).

Downgrade for Clydesdale

Clydesdale Bank, owner of Clydesdale International, has been downgraded by ratings agencyMoody’s. There are rumours that the bank’s owner, National Australia,could put Clydesdale and its sister, Yorkshire Bank, up for sale.

Clydesdale International, which still has one of the best five-year fixed rate deals at 4.15 per cent, has withdrawn its sterling, euro and US dollar accounts from sale.

By Charlotte Beugge  Source:  Telegraph 3/10/11