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How to Invest UK Funds

How to Invest UK Funds

Old Sep 27th 2009, 9:32 pm
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Default How to Invest UK Funds

I am presently resident in the USA and have recently received a reasonably large sum of money in the UK. The funds are presently in sterling and I am trying to figure the most appropriate means to invest them.

The UK bank that I have had for a number of years is pretty useless in terms of the interest that it will pay on the funds (~0.1%). It seems that none of the UK banks will open an account for someone who is not a UK resident and I don't want to bank offshore having watched what has transpired with IoM and Jersey banks in the last year or so. I could exchange to dollars however the exchange rate at the moment is not fantastic (although I am not sure it is likely to improve any time soon either).

Does anyone have any thoughts as to the most effective / reasonable means through which I might invest these funds in order to earn a reasonable return.

Thanks for your help.
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Old Sep 27th 2009, 10:34 pm
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Default Re: How to Invest UK Funds

Thanks for your response. I'll message you as you suggest
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Old Sep 27th 2009, 10:56 pm
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Default Re: How to Invest UK Funds

Transfer them using Xe.com maybe.
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Old Sep 27th 2009, 11:32 pm
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Default Re: How to Invest UK Funds

Originally Posted by pfedirchuk View Post
Could you contact me privately?

Thank you,
No, that would be spamming for business and you'll get banned. If you want to openly help people on a general basis your more than allowed to though.

Read up on the site rules, they'll help you out.

Last edited by meauxna; Oct 8th 2009 at 5:04 pm. Reason: take out her name so her post is useless
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Old Sep 28th 2009, 9:18 am
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Default Re: How to Invest UK Funds

Originally Posted by Texan View Post
I am presently resident in the USA and have recently received a reasonably large sum of money in the UK. The funds are presently in sterling and I am trying to figure the most appropriate means to invest them.

The UK bank that I have had for a number of years is pretty useless in terms of the interest that it will pay on the funds (~0.1%). It seems that none of the UK banks will open an account for someone who is not a UK resident and I don't want to bank offshore having watched what has transpired with IoM and Jersey banks in the last year or so. I could exchange to dollars however the exchange rate at the moment is not fantastic (although I am not sure it is likely to improve any time soon either).

Does anyone have any thoughts as to the most effective / reasonable means through which I might invest these funds in order to earn a reasonable return.

Thanks for your help.
I've always wondered at how low interest rates are in US banks (even before the banking crisis and drop in the Fed). Are you sure you can't open any kind of UK account? I know they are wary of openikng current accounts, but I thought deposit accounts were easier.

There's a thread on MBTTUK that has suggestions of banks who will open for nonresidents (but it may be only for returning residents). HSBC came up several times.

OTOH, I have a lovely 3BR property you can buy if you want to invest in the UK ... the only way is up, baby.

The thread on MBTTUK is here: http://britishexpats.com/forum/showthread.php?t=621786

and another here:
http://britishexpats.com/forum/showthread.php?t=630926
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Old Sep 28th 2009, 12:39 pm
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Default Re: How to Invest UK Funds

Originally Posted by Texan View Post
I am presently resident in the USA and have recently received a reasonably large sum of money in the UK. The funds are presently in sterling and I am trying to figure the most appropriate means to invest them.

The UK bank that I have had for a number of years is pretty useless in terms of the interest that it will pay on the funds (~0.1%). It seems that none of the UK banks will open an account for someone who is not a UK resident and I don't want to bank offshore having watched what has transpired with IoM and Jersey banks in the last year or so. I could exchange to dollars however the exchange rate at the moment is not fantastic (although I am not sure it is likely to improve any time soon either).

Does anyone have any thoughts as to the most effective / reasonable means through which I might invest these funds in order to earn a reasonable return.

Thanks for your help.
As Dunroving suggests, buying a house in the UK is one good long-term investment. Buy his, and he'll probably manage it for you

I would suggest you look again at offshore opportunities. Banks in the Isle of Man are paying between 2% and 3.5% or so on savings accounts at the moment. Somewhat modest I know, but a good short to medium term strategy. Keep your balance below 50K in any one bank and you'll be protected by the IoM deposit insurance scheme.
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Old Sep 28th 2009, 2:40 pm
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Default Re: How to Invest UK Funds

If you have over 50000 GBP I think that a HSBC Premier account is a good way to go. You can have an account in the US and UK and transfer money at the prevailing rate between $ and GBP. For GBP they have bonds of varying lengths with reasonable rates. Last time I checked it was 2.75% on a 6 month bond and 3.25% on a 1 year bond.

Investing in mutual funds in the UK can be a complicated business if you are US resident for tax purposes.

Cheers,
Sam
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Old Sep 28th 2009, 4:09 pm
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Default Re: How to Invest UK Funds

Apologies if anyone thinks I'm spamming or trolling for business, that is not the case. I'm a Canadian living in the USA and have first hand knowledge of these types of financial matters.

I asked that he contact me privately because it is a private matter, and will share general information with the forum freely.

These types of forums helped me over the years go from temporary visa holder to permanent resident, with all the ancillary financial, political, and social difficulties we expats typically deal with. I'd like to help if I can.
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Old Oct 8th 2009, 2:18 am
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Default Re: How to Invest UK Funds

Originally Posted by robin1234 View Post
As Dunroving suggests, buying a house in the UK is one good long-term investment. Buy his, and he'll probably manage it for you

I would suggest you look again at offshore opportunities. Banks in the Isle of Man are paying between 2% and 3.5% or so on savings accounts at the moment. Somewhat modest I know, but a good short to medium term strategy. Keep your balance below 50K in any one bank and you'll be protected by the IoM deposit insurance scheme.
I think that you should be careful in advising folks to look offshore. Although the Isle of Man (and perhaps other offshore locations such as Jersey) state that they have deposit insurance to cover GBP 50,000, this is not in fact the case. There is no pre-funded compensation fund available - compensation will be paid (perhaps) through a levy on participating banks once a bank has gone bust. There is no government guarantee, e.g FDIC, that ensures that money will be repaid. The IoM has already had to work very hard to repay losses associated with the KSF debacle (I was one of the unfortunate depositors). Although I (eventually) was repaid I wonder whether there will be adequate and sufficient funds available to handle any further issues.
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Old Oct 8th 2009, 1:04 pm
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Default Re: How to Invest UK Funds

Originally Posted by Texan View Post
I think that you should be careful in advising folks to look offshore. Although the Isle of Man (and perhaps other offshore locations such as Jersey) state that they have deposit insurance to cover GBP 50,000, this is not in fact the case. There is no pre-funded compensation fund available - compensation will be paid (perhaps) through a levy on participating banks once a bank has gone bust. There is no government guarantee, e.g FDIC, that ensures that money will be repaid. The IoM has already had to work very hard to repay losses associated with the KSF debacle (I was one of the unfortunate depositors). Although I (eventually) was repaid I wonder whether there will be adequate and sufficient funds available to handle any further issues.
You are absolutely right in your comments about the limitations of the Isle of Man’s Depositors’ Compensation Scheme. Here is a description of the Scheme from the Government Financial Supervision Commission. I followed the unfolding KSF crisis with great interest; I'm glad you got your money back. In my own case, I wanted to keep money in sterling bank accounts, earning reasonable interest, and, since I live abroad, a UK bank account was not a real possibility. So I limited my deposit at any one bank (in the IoM) to less than 50K and chose institutions carefully. That's all you can do; after all, there is never an ultimate guarantee. Let's say there is hyperinflation in the US, for instance. Your deposit in an American bank may be insured but it is still worthless...
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Old Oct 9th 2009, 1:44 am
  #11  
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Default Re: How to Invest UK Funds

Originally Posted by Texan View Post
....There is no government guarantee, e.g FDIC, that ensures that money will be repaid...
I wouldn't rely on the FDIC though, they've got 100 years before they have to repay you the money and can begin repaying you at any time that they say is a financial improvement.
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