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Offshore account Sterling VS dollars

Offshore account Sterling VS dollars

Old Apr 2nd 2007, 11:04 pm
  #1  
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Default Offshore account Sterling VS dollars

Currently I am living and residing in US but I am interviewing for a job overseas in middle east and I wanna to open an offshore account
I am confused because many offshore accounts gives me higher interest for Sterling than the dollars and many banks offered me that converting my dollars to Sterling and open account for higher interest

my question is , is it a good idea to convert my dollars to sterling and have higher interest rate OR keep the offshore account in dollars with lower interest rate ?

Thanks

Last edited by ramNagab; Apr 2nd 2007 at 11:30 pm.
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Old Apr 2nd 2007, 11:40 pm
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Default Re: Offshore account Sterling VS dollars

Originally Posted by ramNagab View Post
Currently I am living and residing in US but I am interviewing for a job overseas in middle east and I wanna to open an offshore account
I am confused because many offshore accounts gives me higher interest for Sterling than the dollars and many banks offered me that converting my dollars to Sterling and open account for higher interest

my question is , is it a good idea to convert my dollars to sterling and have higher interest rate OR keep the offshore account in dollars with lower interest rate ?

Thanks
Okay,

I'm not an expert...but I'm an American who's lived in the Middle East and the UK. Here's some factors that may be involved:

1) Each country has their central banks which set interest rates for loaning money. Basically it has to do with the cost of creating money and the money in circulation's purchasing power. The interest rate difference between the dollar and sterling accounts may be because of the different central banks.

2) There is the cost of converting the money. While not as tangible as the interest rate on the accounts, when you add the cost of converting the money, does the higher interest rate still make sense??

You didn't mention if you will need a Sterling account in the Middle East. You could very well be paid in Riyals or Dinars and have to make a conversion there. In either case, it's probably best to keep the majority of your money in the currency you will use the most.

Also, one trick I noticed when I had the opportunity to have a dollar and pound account with the same bank...there was something called a **discount rate** for money conversion. If I wanted the flexibility of having my money in 2 different currency accounts, I would get it with an offshore bank that allowed for a **discount rate** conversion rather than pay the higher going rate.

Don't know if that helps...:-)
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Old Apr 3rd 2007, 12:15 am
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Default Re: Offshore account Sterling VS dollars

I'll get paid in Riyal but I need a central point of access where I can get my money anywhere in the world . I thought in banks like Barclays and HSBC .
I do not think that I'll need the Sterling at all . I need dollars because I'll return back to US after my contract is over in middle east . I am thinking that to keep Sterling because the high interest rate which I'll get

Last edited by ramNagab; Apr 3rd 2007 at 12:19 am.
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Old Apr 3rd 2007, 12:21 am
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Default Re: Offshore account Sterling VS dollars

Originally Posted by ramNagab View Post
I'll get paid in Riyal but I need a central point of access where I can get my money anywhere in the world . I thought in banks like Barclays and HSBC .
I do not think that I'll need the Sterling at all . I need dollars because I'll return back to US after my contract is over in middle east . I am thinking that to keep Sterling because the high interest rate which I'll get
Keep it in dollars then, otherwise you run the extra fx risk - plus converting at the moment you wont get many pounds for the $ and likely the rate will move against you not with you
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