Offshore Savings Accounts
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Friday, 05 December 2008 15:23 |
Offshore Savings AccountsThe winning strategy So, what strategies have the leading deposit-takers been following since we last spoke to them back in February? Most people were talking about the low interest rates at the beginning of the year. The feeling was that more higher-yielding products would be launched to try to retain depositors. To a certain extent this turned out to be true, while interest rate rises in recent months have steadied the market somewhat.
Deposit-takers need to appreciate that income is particularly important for expatriate clients, says Neville Benbow at HSBC Offshore. In the light of this, he says, those that have performed best this year are those that passed on the benefits of rate rises to their customers, but also provided good value when they fell. Offshore Savings Accounts & Ketan MaldeKetan Malde at Sun Bank International believes that consistency is an important aspect of both onshore and offshore deposit accounts. He says: “Although we may not always offer the highest rates around, we are a consistent top quartile performer. Some deposit-takers have been tempted into headline rating because of the low rates this year, but I don’t think this is a productive strategy in the long term. “Lots of people were going for variable rates at the beginning of 1999 when rates dropped by one and a quarter per cent. No-one wanted to fix their rates in case they subsequently rose. Now, however, fixed rate accounts are the thing. Only in the last couple of weeks, we have increased our fixed rates by nearly one-half per cent in preparation for the anticipated low long-term rates,” Malde adds. Sun Bank’s approach has clearly found favour with its customers with its offshore deposits increasing by 60 per cent this year. Offshore Savings Accounts - Bristol West InternationalBristol & West International’s Chris Bradshaw says that it follows a similar policy of consistency. He comments: “Consistent rates are very much a need of our customers. When people offer high headline rates this does have a big impact on the market but it’s important for our own reputation not to play this game. If we do make an introductory offer we make it clear that this is what it is and when it will end.” Some smaller and less well known companies, says Bradshaw, have been trying to get a foothold in the market with high headline rates. While these do attract customers in the short term it is not a strategy the larger market is keen to follow. Offshore Savings Accounts - Rates Have Fallen“Rates have fallen but we’ve retained our position in the market by offering fair rates of interest and by product diversification. The strength of our brand has undoubtedly given us a head start,” says David Siddall at Abbey National Treasury International, “In terms of products, this was the first year that Cater Allen introduced structured equity-linked bonds to its range.” Over the last ten months, Abbey National International and Cater Allen continued to respond to the changing market with a variety of different term products, structured equity-linked accounts and fixed rate bonds. Siddall adds: “In the light of what has been happening to interest rates, people are much more comfortable with locking in their capital in order to better their returns.” For more relevant news items and magazine articles please click the links below:
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