Calis Beach and Fethiye Turkey Discussion Forum
Information and Services in Turkey Section => Banks, Interest, Money Transfers, Insurance => Topic started by: sue mac on May 19, 2015, 14:15:20 PM
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We have recently sold a property in uk which we rented out. We now have money sitting in a uk bank account paying approx 0.01% interest! I am wondering if now is a good time to invest a few thousand in turkey? In view of the current exchange rate, and the interest rates, could anybody advise me on the best place to invest for a monthly interest that I could withdraw when I am over on my Easter and summer holidays? I am thinking of investing around £25000 either in joint names or split equally between two accounts, one in my name and one in my spouses. How do I get the £25000 into turkey and invest it in lira Ie approx 100000 TL at present? I am based in fethiye, so would need a bank in fethiye. Many thanks for info.
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Just send the £25k to me and I'll send you back £15k in six months time. No awkward transfers and I won't even look for a management fee. :)
JF
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sue mac
If JohnF had been rather less pithy he might have said it ain't the smartest thing to decide on investing £25k based on what people on a forum might say. Actually, I guess you'll be making up your mind based on rather better research than that. I never advise anyone on investing, but here's a couple of calculations to consider:
1. In the UK, open a Santander 123 current account and transfer your direct debits there. This pays 3% up to £20k. The sum is: 3% less tax (at 20%) is 2.4% take inflation into account (-0.1%) = 2.5% increase.
2. In Turkey, open an account with a bank that pays 9% less tax (at 15%) is 7.65% then take inflation into account at 7.9% = -0.25% = 0.25% loss.
There are UK accountsthat pay better than Santander and there are also lots of ISAs (cash and stocks&shares that don't pay tax). You have plenty of choice.
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Thanks colwyn....obviously I am not going to make my decisions purely on answers on here....I'm just after a few different opinions. Some people you speak to reckon its a no brainer, others wouldn't put a penny into the country. ..I've got the Santander 123 account and will be maximising ISAs. I'm lucky that the £25000 is only a small portion of the sale money. I'm also paying off our mortgage. This may sound stupid, but if I am leaving the money there to draw out the interest on my two visits per year, how am I affected by the high inflation? I don't live there, and am not purchasing on a daily basis. Interest of 7% + seems a decent rate to get me a few thousand lira spending money every July. .....? Thanks again
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If you are buying goods and services in Turkey you will pay Turkish inflation. If you had kept your money nice and safe in Sterling on 19th May last year your £ would buy over 14% more TL today. So you wouldn't have to worry about 7.9% inflation since you'd still be ahead.
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And the Turkish banks I have used make regular charges, so these soon bring the capital down
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Most of the Turks reckon the lira will drop after the elections.....what's your view on this? Not holding anybody to ransom, just want the general opinion!?
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I wonder what currency these Turks hold their savings in? Or bullion.of course.
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We have some money in a Turkish Bank, and have made good interest on it in the past.
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Hello,
We are also considering investing in Turkey
Littlereddevil can you elaborate on what these charges are or and the bank your with.
Thank you in advance.
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The charges vary from bank to bank. Personally were with Finansbank and because we have 2 direct debits going out of our account for bills there are no charges.
You would need to check with each bank really.
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I wonder what currency these Turks hold their savings in? Or bullion.of course.
The shoe box kind of currency.
On a more focused approach I'd say that a 35 day sterling account in TEB or HSBC are available and are paying around 1.7% (less tax at 15%)which is more than you get in the uk, plus you do not have the anguish of money being transferred into TL, with all the risks, costs and issues with it.
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If JohnF had been rather less pithy he might have said it ain't the smartest thing to decide on investing £25k based on what people on a forum might say.
I've been called many things Colwyn, but "pithy" is a first.
I thought I was being humorous but making the message clear. I could simply have said "are you effing nuts?"
After reading about the CHP's plan to build a "mega" city (http://www.hurriyetdailynews.com/turkeys-main-opposition-vows-to-build-new-mega-city.aspx?PageID=238&NID=82743&NewsCatID=338) in Malatya, I tried to come up with some pro's & con's for a non resident chucking a wedge into a Turkish savings account just now. I failed miserably on the pro's, mainly due to your excellent illustration which highlighted the reality of high interest rates and inflation.
The con's... in addition to your points, where do you start?
- The increasing volatility of the lira
- The likelihood of lower interest rates shortly
- Currency exchange fees
- Oh, did I mention the volatility of the lira?
Couldn't be arsed writing any more.
JF
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Glad to hear it John.....and pardon me for being such an idiot. I'm just not as "in the know" as people who live out there, and when we listen to ex pats talking of the great interest rates they are getting, is it any wonder we ask for some advice when we've got a bit of cash to spare..! Thankfully the likes of Colwyn politely offered that advice....thanks Colwyn.
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Just to give you a little more to think about - I was reading something on another forum where the member said he had three Santander 123 accounts. Anticipating people wondering if this was legal he explained that he had one, his wife had one and they had a joint account. I might ask Santander if this is OK as it would give us another opportunity to consider. It would be worth getting the 3% even without cashback since there is a potential £40 per month return (after tax) at a cost of the £2 fee.
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It is certainly legal Colwyn, we have three and also three with TSB with £2k in each and £500 income each month, which is money we move from account to account and get 5per cent for. ;D
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Colwyn - I can second that as a 3 x 123 account holder but even better than that - try this for a challenge :)
The end column on the table before the plan show how many of each accounts any person can have - now this plan does take, time, tenacity and patience :D
]http://www.moneysavingexpert.com/savings/savings-loophole ] (http://www.moneysavingexpert.com/savings/savings-loophole)
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Thanks Sadler and Ian. It might be worth looking to open another 123 account. A bit of setting up required (£500 out; £500 in every month) but automatic after that (I hope). Do you know if I need to add two direct debits to have a valid account? If so can I transfer a couple from my existing 123 a/c?
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You do need direct debits but they can be regular payments to other accounts you have outside of santander but it is cleaner I suppose if you can move two of your existing payments.
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Thanks Ian. I think I'll ask about transferring DDs since Santander T&C says they can only be "household bills".
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Colwyn, for the 123 Santender accounts, you need 2 direct debits. We have several charity dds and use these for the accounts which are not our main current account. We even have an evening paper dd for £2.50 per week which counts as one dd. For the TSB accounts there is no dd required but only interest on £2k, however at 5 percent, this is not to be sneezed at. Happy days. ;D