We compare almost everything in our lives, especially before buying something expensive. This is, without any doubt, the smartest thing to do and after some research you can often save yourself some money.



When it involves banking however, and especially the interest rates, most people look no further. Yet there are big differences in interest rates between the various banks.

It will make a big difference whether you receive 2,75. You do not have to be a mathematician to realise this difference can earn you a nice sum annually. We will show you how your interest can advance to over 8%.

It is time to start comparing all available interest rates. We do not limit ourselves to the banks of our home country but we search worldwide!

WHERE DO YOU FIND THE HIGHEST INTEREST RATES ON YOUR SAVINGS?

Everybody wants to receive the highest possible interest rates on their savings. It is however not easy to choose the best option from all available offers.

There are a lot of banks that claim they offer the highest interest rates of their country but if you look closely to their terms and conditions it becomes clear that some of them offer their highest rates only if your initial deposit is a minimum of 10.000 ! Other banks demand that you do not withdraw your money for at least 12 months.

These examples make it clear that it strongly depends on the wishes and possibilities of the saver where the best interest rates can be found.

The next questions are of great consequence:

- How high is the real annual percentage yield?

- Is there a minimum or maximum amount to deposit?

- Can you withdraw your money at any time?

- Are there any other costs involved?

One other option for some people could be to save their money with a bank abroad. Often you can get very high interest rates on deposits in foreign currencies.

SAVING ABROAD IS NOT WITHOUT RISK!

Saving your money in a foreign country however is easier said than done!

At first it is often very difficult, if not impossible to open a bank account in another country than your own.

Secondly banks generally require that when one wants to profit from the attractive interest rates offered by them you will need to be a resident of the country where the bank is established.

Thirdly is saving abroad not without risk. You will need to take into consideration that there always is a chance of depreciation of the foreign currency with respect to your own currency.

SAVINGS & GUARANTEES

Most people trust that if they put their money into a bank account that it will be always there when they need it. Unfortunately history teaches us that this is not always true. For this reason almost every government has put into place some regulation that there must be some kind of protection for their citizens in case a bank could no longer meet its obligations. Nowadays most account holders are partly protected by some sort of regulation agreed between banks and the government.

GUARANTEES WITHIN EUROPE

The guarantee scheme is a regulation which protects the interests of account holders. The European Union obliges the Member States to set up such a regulation and gives minimum standards to which those regulations must apply.

The guarantee scheme gives protection to individuals, small ventures, associations and foundations which are entitled to a reimbursement on the bank which is unable, or likely to be unable, to pay claims against it. The regulation provides in most cases in repayment up to Euro 38.000 by account holder by bank.

Important note: If you want your savings assured as much as possible, then you must split up your savings over several accounts with several different banks.

GUARANTEES OUTSIDE EUROPE

Also outside Europe almost every country has similar guarantee schemes.

The United States know the FDIC : Federal Deposit Insurance Corporation. They know a guarantee of USD 100,000 and under some circumstances even 250,000.

The United Kingdom know the FSCS : Financial Services Compensation Scheme.

SAVINGS & TAXES: Tax Directive 2005

The European Savings Tax Directive is one of three measures relating to tax which together are known as the EU Tax Package and came into effect on the 1st July 2005. Simply put, ESD is an agreement between the EU Member States to automatically exchange information about any customers who earn savings income in one EU State but who reside in another EU State. This is known as the 'automatic exchange of information option' and it is the ultimate objective of the Directive. Therefore, an individual's identity, their address, the bank or investment house where their affected assets are held, the level of 'savings income' received and the period over which it has been received will all be passed automatically by the tax authority in the country in which the money is 'housed' to the tax authority in the country in which the individual resides!

Whilst automatic exchange of information is the ultimate objective of the ESD, three EU Member States (Austria, Belgium and Luxembourg) have opted to apply alternative arrangements during a transitional period. Under these arrangements, tax will be deducted at source from income earned by EU resident individuals on savings held in other EU countries (the withholding tax option). See the bottom of this page.

The purpose of the EU Savings Tax Directive is to ensure that interest earned on bank accounts held by EU residents is fully taxed. This is intended to eliminate a common form of tax evasion whereby those living in the European Union avoided tax on their interest income by holding their personal bank accounts in a different member State.

Like most European taxes, the EU saving tax directive is a tax on residency not citizenship so if you are an expat living permanently outside of Europe, you fall outside the scope of this legislation, regardless of the location of your bank account(s).

It is also worth remembering that a retention tax provision has also been adopted by some European countries and territories that are not themselves EU member states, such as the Isle of Man, Guernsey, Jersey, Switzerland, Liechtenstein and Andorra. The EU savings tax directive is also being applied to the bank accounts of European Union citizens in the more exotic tax haven locations of the British Virgin Islands and the Turks and Caicos Islands.

Many other countries and territories, have arrangements with the Europe Union to exchange information relating to bank accounts.

If you would like to learn more about foreign savings accounts or time deposits in foreign currencies, please visit http://www.fintell.com