6.45% Anglo Irish Bank Sterling Deposit a/c

[nissanfigaro]

This is my first posting so excuse me if it has been covered before.

I note Anglo Irish Bank gives out rates for funds held in Sterling ....6.45% on 3 months fixed

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What are the pros and cons/restrictions of holding a foreign currency account other than the obvious risk of currency fluctuations?

 

[nissanfigaro]

todays rate has reduced to 6.3% gross

 

[jpd]

No tax restrictions - only pro is holding foreign currency - in case the euro goes down value of investment rises, only con is holding foreign currency - in case ...

Forecasting future foreign exchange rate movements is not possible either short term or long term.
The interest rate differential ie 6.2% on sterling v 4.4% on euro reflects the market opinion on future exchange rate but its only that - opinion

 

[nissanfigaro]

is there any tax implication if the value of your sterling deposit drops against the euro and you end up withdrawing more than you deposited?

 

[HighFlier]

If you have sterling to invest fine but if you are going to convert Euros to sterling and back to euros again you will lose over 4% which is most of your first years interest.