Offshore Savings Terms Made Easy - Gary Quaggan Answers the Most Frequently Asked Questions from Expats in 2010

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Gary Quaggan, Head of Retail Service & Operations at Anglo Irish Bank Corporation (International) PLC, explains some of the terms used regularly by banks and financial institutions in relation to offshore savings accounts.

Choosing the right account isn't always a straight forward decision. There's so much choice on the market and accounts can vary widely. For expats, the choice can be even harder. Gary Quaggan from Anglo Irish Bank answers some of the most frequently asked questions by expats at the start of 2010 regarding offshore interest rates and savings accounts:

"Given the wide range of products available, it is important for expats to understand exactly what terms are relating to their account", Mr Quaggan comments. "It can be a bit tiresome but learning the basics can go a long way. You don't need to become an expert instantly, but just by learning a handful of these terms you can save yourself time and often unnecessary confusion or worry."

  • Gross: "This term generally means before deductions, when banks are promoting their products you will often see the interest rate followed by the term "gross". This will generally mean the rate of interest earned on a deposit account before the deduction of tax."
  • Retention Tax: "A mandatory tax placed on income (interest) that is earned on savings accounts in a country that is not the resident's home country. This only applies to countries that are members of the European Union (EU). This is deducted at source by the bank providing the savings account and is currently at a rate of 20% p.a."
  • AER: "The amount you will be given for any money held in a savings account is presented to you as a percentage Annual Equivalent Rate (%AER). The AER is given to demonstrate what your interest return would be if the interest was compounded and paid annually instead of any other period (e.g. monthly)."
  • Multi-Currency: "When a Bank is offering their products in more than one currency, the most popular currencies being the United States Dollar (USD) the British Pound (GBP) or the Euro (EUR)."
  • Fixed Interest Accounts: "The Interest rate offered or advertised is fixed for the term of your account. The interest rate offered is generally higher than that available on a variable rate Notice or Access Account."
  • Variable Rate Accounts: "As the name suggests the interest payable on these accounts is not fixed, and can be changed at any time by the bank providing them."
  • Access Accounts: "These products generally give you immediate access to your money upon request, without penalties. These are also known as Demand Accounts."
  • Notice Accounts: "A savings account on which the customer is contracted to give a specified notice period before making a withdrawal, usually in return for higher interest rates. A penalty may be imposed by the bank providing the account if a withdrawal is made prior to or without the agreed notice period being undertaken."
  • Documentation: "In order to facilitate the opening of a regular or offshore savings accounts, banks are required to have completed the necessary Due Diligence on the applicant in order to ensure that they are certain as to the identity of them. Therefore the banks are legally obliged to request documentation of proof of identification (such as a passport) and up to two separate items that prove your address. Typically, this proof of address can be a utility bill or a bank statement."

The material contained in this article is for general information purposes only and does not constitute investment advice or an offer to buy or sell or a solicitation of any investment products or other financial product or service. You should not act or refrain from acting on the basis of any material contained in this article without seeking appropriate professional advice. All information is provided "as is" and without warranties express or implied and Anglo Irish Bank Corporation (International) PLC accepts no liability whatsoever for any inaccuracies, errors, omissions, opinions or misleading information or for any action taken or not taken in reliance on the information in this message. Any expressions of opinion are current opinions as at the date of publication and are subject to change without notice.

Anglo Irish Bank Corporation (International) PLC is licensed by the Isle of Man Financial Supervision Commission. Registered number: 037910C

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Anglo Irish Bank Corporation Limited
Stephens Court
18/21 St. Stephens Green
Dublin 2

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