Post by: Karennina on January 31, 2015, 20:26:21 PM
Just making plans for the future.thanks for any help ;)
Post by: GordonA on January 31, 2015, 20:50:35 PM
Post by: Jacqui Harvey on January 31, 2015, 21:32:33 PM
Post by: Karennina on January 31, 2015, 21:43:44 PM
Post by: Highlander on January 31, 2015, 22:00:40 PM
Post by: kevin3 on January 31, 2015, 22:39:08 PM
It was 10 years ago so a bit vague but I think the bank got me a Tax number'
I may be wrong.
Post by: Karennina on January 31, 2015, 23:21:20 PM
Post by: Kevin Sowten on February 01, 2015, 05:03:43 AM
Post by: Karennina on February 01, 2015, 06:22:44 AM
My memory is not what it used to be and I just could not remember if you needed to produce a tapu in order to open a bank account out there ;)
Post by: WordBird on February 01, 2015, 08:00:56 AM
Post by: LeeGlo on February 01, 2015, 10:19:19 AM
Post by: suehugh on February 01, 2015, 12:18:10 PM
I see interest rate of anywhere between 5 & 10 % advertised . Is this an annual or monthly rate.
Say you invest 10K @ 10% advertised rate
Is this 1K per month payable or 1K per year. If it was the former, Wow.
If you leave the interest, does it compound .
Is the tax deductible at source. I.e. The bank ?
Sorry to hijack the thread
Hugh
Post by: Highlander on February 01, 2015, 14:02:48 PM
Post by: Bluwise on February 01, 2015, 14:59:36 PM
Post by: Colwyn on February 01, 2015, 15:44:20 PM
I'm surprised more 'tourists' don't save here !!What!! And risk my savings losing 5% of their value in a week - as they would have done this last week. No thanks. And no thanks until Erdogan is evicted.
Post by: Karennina on February 01, 2015, 16:40:12 PM
Unfortunately I don't, do you think you could elbarate on your post if you wouldn't mind as in do you think I would be making a mistake putting a large ish sum if money in a Turkish bank account as opposed to in the Uk, I am a little worried now as to whether I should carry out what I was planning :)
Thanks...
Post by: suehugh on February 01, 2015, 21:07:19 PM
If the bank advertises 10% interest rate, is that an annual interest rate, but payable in monthly chunks
e.g 10K deposit would yield 83.0 per month over 12 months assuming interest drawn every month.
Post by: Highlander on February 01, 2015, 21:11:31 PM
Post by: LeeGlo on February 01, 2015, 21:15:30 PM
It's great while you're going from sterling to lira but not much fun if the lira goes down even further, quite possible, and you need to change back.
Post by: kayakebab on February 01, 2015, 22:13:04 PM
So for example... You choose a 30 day savings account, they will tell you the interest rate set for that month for example 9%
On day 30 you will get 9% interest on your lump sum ( less 15% tax on the interest) put into your account. -Provided you haven't touched the account.
You can choose to keep rolling it over each month, or have the interest paid into a separate account. There's loads of options.
There are sometimes bonds where you tie your money up for a few months, usually get a slightly higher rate interest and you pay 10% tax.
You can also have an account that you can draw from regularly, that still earns interest, but it will be a lower rate.
Be careful Karen...as people say you could lose if exchange rates change... For example my savings were converted at 2.6 TL to the £
The rate is now 3.6 tl
So if I changed my money back to sterling I would lose substantially.
On the other hand if I invested today it's likely the rate won't stay as high and I would be better off.
Sadly no crystal ball.
If you plan to spend the money here and not relying on converting back to sterling then it's not so bad.
Although my money would be worth less if I changed it back to sterling what I've had in interest on it over the years is about the same as I would lose, if that makes sense? And that only works when interest rates are high, not so long ago they dropped down and they ultimately want to get them very low, but they had to increase because of the rising exchange rate.
Its very unpredictable. I'm afraid... Don't sink all your money in, play with what you could afford to lose and you may be lucky and gain.
Post by: Karennina on February 02, 2015, 10:20:47 AM
I can't believe there is a thread on Facebook today asking if you need to have residency to open a bank account, some answers are saying that some banks won't let you open accounts unless you can show you have residency!
Post by: Colwyn on February 02, 2015, 11:06:45 AM
Colwyn I have read a lot of your posts on here over the years and I can tell you know your stuff ;)Very kind, Karennina. I have to start with a financial health warning. I am not now, nor have I ever been, a financial advisor. Whatever knowledge I have comes from a life-long interest in economics and the need to sort out my own finances in retirement. So I won't advise you what to do; merely outline how I have been thinking about this.
Unfortunately I don't, do you think you could elbarate on your post if you wouldn't mind as in do you think I would be making a mistake putting a large ish sum if money in a Turkish bank account as opposed to in the Uk, I am a little worried now as to whether I should carry out what I was planning :)
Thanks...
Looking at the interest rates in the UK and comparing them with what you can get from a Turkish bank it looks like an easy decision. The best I can get in the UK for an ordinary bank account is 3% from Santander (which is thus my main bank) - although there are some strings on this and my return is actually higher than 3% from cash back. What is the rate you can get in Turkey? Last time I asked it was about 10% and that is an easy number to use. So Turkey looks best. But to see how much return you actually get in real terms in each country you need to knock off tax and then see what you get against inflation. So: 10% less tax (@ 15%) = 8.5% less inflation (@ 8%) = you will be 1.0% better off in buying power at the end of the year in Turkey. If we do the same for the UK 3% less tax (@ 20%) = 2.4% less inflation (@ 1%) = you will be 1.4% better off in buying power in the UK. So (surprisingly?) you are doing better living in the UK than in Turkey out of your banks.
Now, what you are thinking about doing is more interesting than this (ouch for the pun); you are looking at earning Turkish interest and living in the UK. So high interest @ 8.5% and low inflation @ 1% = better off by 7.5%. It is win-win and a great deal all round. isn't it? It is as long as the value of the TL against the £ remains stable. The exchange rates were remarkably stable right through the 2000s, in fact the lira actually gained value. Historically this was very unusual but people got used to it. In theory, if Country A has much greater inflation than Country B (Turkey and UK) then Currency A should fall in relation to Currency B (TL loses value) all other things being equal. But, of course, all the other things muck up this simple theory. Turkey has experienced huge streams of money coming into the country which has supported the lira despite weaknesses in the economy. Now, the question we have to ask is whether this will continue or have the good times come to an end? Well "You pays your money and takes your choice" as they say. Which way do you bet? Obviously you would be taking a risk but big returns often involve risk taking (unless you are banker-financier and can rig the market as several recent scandals have shown). I choose not to take risks in currency exchange and especially not in relation to Turkey and the increasingly worrying behaviour of RTE. There are different kinds of risks and if you are prepared to take them you might make even better money. For example, £10,000 put into a US market tracker ISA in January 2014 would have given a return of £2000 tax-free today to pay for your next Turkish holiday.
Sorry this has been such a long post; it is difficult to say some things briefly and clearly. If I didn't manage the clarity please ask for better explanation and I'll see what I can do.
Post by: JohnF on February 02, 2015, 11:52:59 AM
My take on it is a bit more simplistic.
Q) What currency do rich (or even not so rich) Turks keep their wedge in?
A) Anything but their own Lira. Traditionally the USD, but in recent years also in GBP and EUR. Its why its so easy to open foreign currency bank accounts, everyone does it.
Historically, the high interest rates in Turkey were needed because inflation has always been an issue. No-one is going to save if their money is worth less (in spending power) at the end of the month, hence interest rates were always higher than the inflation rate (generally speaking).
Currently, inflation is running at 8/9% in Turkey and the banks are offering in the region of 10% interest. You don't need a degree in economics to work out what your true interest rate is after tax...
As regards sinking a bucket of money into the Lira while living in the UK (and not therefore directly subject to Turkish inflation) - all I'll say there is, do you think the Lira will strengthen or weaken over the period you intend to invest? If you know the answer to that one you'd be a happy (and rich) little camper.
JF
Post by: Colwyn on February 02, 2015, 17:35:31 PM
But to see how much return you actually get in real terms in each country you need to knock off tax and then see what you get against inflation. So: 10% less tax (@ 15%) = 8.5% less inflation (@ 8%) = you will be 1.0% better off in buying power at the end of the year in Turkey. If we do the same for the UK 3% less tax (@ 20%) = 2.4% less inflation (@ 1%) = you will be 1.4% better off in buying power in the UK. So (surprisingly?) you are doing better living in the UK than in Turkey out of your banks.What a silly mistake. I am full of embarrassment! In Turkey you would be 0.5% better off as against 1.4% in UK. Sorry!
Post by: suehugh on February 02, 2015, 18:35:12 PM
Thanks for the info
Just to clarify as at my age it takes a while to sink in.
After 30 days would you collect a 1/12 of 9%' or the full 9% less tax of course
Thanks also Colwyn for the overview
Post by: suehugh on February 02, 2015, 18:38:47 PM
Suehugh - sorry for misreading your original post :-[Nothing to apologise for Highlander
Hugh
Post by: Karennina on February 02, 2015, 18:45:48 PM
Thanks also to John, decisions decisions ;)
Post by: kayakebab on February 02, 2015, 22:24:36 PM
Post by: suehugh on February 03, 2015, 10:34:46 AM
Post by: Colwyn on February 03, 2015, 10:52:27 AM
The full 9% less tax SueAre you sure about that, KK? Doesn't sound right to me. That would give an annual interest rate of 108%. No wonder Sue thinks "Wow!" and Highlander threatens to be on the next flight over!
Post by: kayakebab on February 03, 2015, 11:32:49 AM
my online account tells me interest to be applied each month, currently 9.5%
On for example 100,000 tl the interest after tax would be approx 700tl a month...
So whatever that is...
Errrmmm....yes it must be yearly.
Post by: Colwyn on February 03, 2015, 11:37:20 AM
Post by: nichola on February 03, 2015, 13:39:40 PM
While I appreciate that inflation is high in Turkey it costs me a fraction of what it cost to live in the UK.
Inflation rates for Turkey
http://www.global-rates.com/economic-indicators/inflation/consumer-prices/cpi/turkey.aspx
Post by: suehugh on February 03, 2015, 21:36:51 PM
Maybe not wow but still good as long as you don't luuk to convert back to other currency.
Maybe Highlander should cancel that flight after all
Post by: Highlander on February 03, 2015, 22:22:11 PM
No! I'm not sure... Sums were never my strong point...
my online account tells me interest to be applied each month, currently 9.5%
On for example 100,000 tl the interest after tax would be approx 700tl a month...
So whatever that is...
Errrmmm....yes it must be yearly.
Sorry, couldn't resist. All I can guarantee is that the math is correct (I hope)
Deposit = 100,000.00
Interest rate = 9.50% per annum
Interest Payable = 9,500.00
Months in a year = 12
Month Interest Payable = 791.67
Tax Payable = 10% (assumed)
Monthly Income after tax = 712.50
Post by: suehugh on February 04, 2015, 09:51:01 AM