Offshore banks are challenging their onshore equivalents with ever more competitive rates, both in the fixed rate market and with variable rate products.
However, Thrussell councils caution when investing with offshore banks and says it is imperative that investors do their homework first: “While it is very unlikely that you would need to call upon depositor protection schemes, as the Northern Rock crisis has highlighted it is not impossible for a bank to suffer financial difficulties. While many of the offshore providers are household names, many subsidiaries of our well known banks and building societies, the protection on offer in some cases cannot be more different.
“The depositor rules are based upon where your money is held, so bank in either Jersey or Guernsey and you will receive no cover at all, whereas the Isle of Man does have its own scheme, regulated by Banking Business (Compensation of Depositors) Regulation 1991 which covers 75% of the first £15K per individual.”
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Spent 56 years at Schroders
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