Best Way to Save for Future?

[Ian]

I would like to deposit £20,000 in a savings account and then add £4,500 per quarter.

Any advice as to how to get the best returns - from which bank would be welcome.

I think I should put the £20,000 in a time account for one year and probably the £4,500 deposits into 3 monthly time accounts?

As it seems most banks give the same rate of interest (which I think is now 15% before tax) I am thinking of using TEB or AKBANK near the Otogar as they are close to me and free from the hassle of Finans in town.

Ian

[andrei]

HSBC rate for 1year 16.4% down from 18.5% last year.
Andy

[Ian]

Thanks Andy - that's 1.4% better than I thought!

Ian  

[smudge]

Be very carefull Ian as fluctuations in exchange rate can wipe out all interest gains, if you live here and can move your money about quickly there are good amounts to be made, but do not tie your savings up long term, the longest I go for is one month.
an example at 2.6 exchange
20k = 52000 lira
15% interest net over one year = 7,800 lira
59,800 lira total
sounds good until you need to change it back to sterling
If the rates have been kind, say 2.3 = gbp 26,000 = great
If unkind 3.0 = gbp 19,933 = not so good.
Sorry to put a dampner on things but a friend asked the same thing a couple of years ago when the rate was 2,34 and I said dont do it, he did, three weeks later the rate was 2.6.

[Ian]

Smudge - thanks for reply and advice.

This is money that will NEVER go back to sterling.
I decided at Christmas I would make the exchange when the rate hits 2.80 and I expected that to happen in June - I still believe that to be the case.

I agree that you need to buy at the right rate and if you don't need to transfer it back thereafter - the fluctuations become less of an issue.

My approach with the £4,500 per quarter will be never to transfer below 2.75 - even if I have to wait a year!

Ian  

[smudge]

Sounds like you plan to live here, if so then good luck and hope you make loads of money.
I would still stick to monthly accounts, the interest is much the same and you can take advantage of sliding exchange rates.
Dont forget to haggle for a better interest rate.

[Ian]

Smudge - many thanks - intend to spend 6 months a year there for 5 years and then take a view.

Wasn't sure you could haggle with deposits less then £50,000 and always thought the 12 month time account was the best option but I will look more closely at the benefits of monthly accounts now.

Thanks again - Ian

Ps I have less money than I expected to have at my time of life due to reasons I won't bore you with - so it is important that I make every bit work for me - so I research to the point that I drive Gill mad !!!

[KKOB]

I have a Nigerian friend who could help you with your investment! He's offered to turn my 10,000 YTL into $73,000,000 in 2 years. It's such a good offer, it MUST be safe !

[busybee]

If you held on to your money for a year waiting for the best exchange rate how does that equate with the interest you would have lost for that year.  Come on Smudge do your stuff.

[Ian]

KKOB - thats why I don't have as much money as I should  

BB - I think Smudge might be right - I have done a quick mental calculation lying bed (no comments) and I could have made a 23% profit over the past 12 months - IF - I had bought at 2.85 and exchanged back at 2.3 - say after 6 months of taking interest.

The 23% assumes tax is applied on bank interest but NOT on the profit made from the exchange of currencies back to GBP.

If 15% tax has to be paid on the exchange profit you still net circa 21% as opposed to a net of 14% on a annual 16.4% interest rate return.

I don't have a calculator - so I need to qualify but my next question is: Do you pay interest on currency exchange profits and if so is it 15% ?

I am a working class council estate lad - but I think I am beginning to see how Mr Soros and KKOB made their fortunes!  

Ps I should say Gill did say to me "are you not being a bit greedy trying to make more than 14% - but surely I am just trying to take advantage of opportunites - IF - they come along - and if you keep renewing monthly accounts until the rate is right for one exchange and then you start again - I see no problem with that - especially if you don't drink like me