Getting $$$ in your portfolio

Candystore

Candystore

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I have a GBP offshore account in the Isle of Man. Unfortunately, it is not interest-bearing.

How do I invest in $$$? Is there a local fund manager who can assist? What have you done?
 
Tomtomtom said:
Find an offshore brokerage and transfer directly.

That said GBP at 0% interest is still an appreciating asset in ZAR terms. More than 10% last 12 months, 32% in 5 years :ROFL:
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I am literally earning money by just leaving it there to idle, without even earning interest.
 
Candystore said:
How easy is it to open this account for me as SA citizen and domiciled here, with no other address?
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https://www.fnbci.co.uk/contact-us/contactUs.html

When I opened my account, it only took a day or so to open. The website link to their contact details are above.

I have a USD Global Account with FNB into which I transfer funds on an ad-hoc basis. All is done via the FNB internet banking website. When you do the transfer, there is a short form that requires completing which FNB then submits to the SARB to obtain approval for the ZAR leaving SA. The entire transfer process takes about an hour from pushing the button until the USD's reflect in the Global Account.

Once a year in December, I then transfer the funds in the Global Account to the Channel Islands account. Again, this is done via the FNB internet banking website where you set up the Channel Islands account as an international beneficiary using the SWIFT details. Once the payment has been processed the funds reflect in the Channel Islands account within 24 hours.

I requested the Channel Island account to be linked to my SA FNB online banking platform so it appears as a separate account when I log on to FNB. You of course also get log in details to the Channel Island banking platform from where you can make transfers, payments etc.

I live in SA and only have an SA passport.

The only other bank that I know that allow SA citizens (that has no dual citizenships/other permanent residence status) to open a foreign bank account is Investec, though their one is UK Pounds only and you are allowed to have the UK account as long as you have a bank account with Investec in SA.

I have a call account with FNB Channel Islands denominated in USD. It is free of charge if you maintain the minimum blalance. You can opt for a full current account, which is a full transactional account with debit card etc but there is a monthly fee (that is waived if you maintain the minimum balance) and it is only available in UK Pounds. Since I have zero interest in ever living in, or be associated with the British, I opted for a the USD call account and together with the USD Global Account's debit card, it can be used for transactional banking should you wish.
 
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As a South African you may not have an interest-bearing bank account abroad. Due to this, most banks across the globe will offer you a bank account, but you will not receive any interest on your funds. But, also check out Transferwise.com. I remember getting an email earlier this month where they now claim that they will share the interest they get from deposits with users. I have not followed up on this, but it may be worth your while to see what they offer.
 
rvZA said:
As a South African you may not have an interest-bearing bank account abroad. Due to this, most banks across the globe will offer you a bank account, but you will not receive any interest on your funds. But, also check out Transferwise.com. I remember getting an email earlier this month where they now claim that they will share the interest they get from deposits with users. I have not followed up on this, but it may be worth your while to see what they offer.
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I currently get 2.4% PA on the Channel Islands call account, monthly credited against the account plus an annual IT3 certificate indicating the foreign interest received.

If I opt to transfer the current balance to a USD denominated 32-month fixed deposit account, the interest rate will be 3.75% PA.

Very few international banks will allow you to open a bank account while either not residing in the country or having a passport. If you are planning on emigrating to the UK or US and already have an address there (plus the right to live there), a few of the digital only banks will allow you to open an account while still in SA, the most popular UK ones are Starling Bank and Monzo while in the USA its Revolut.
 
Affieplaas said:
https://www.fnbci.co.uk/contact-us/contactUs.html

When I opened my account, it only took a day or so to open. The website link to their contact details are above.

I have a USD Global Account with FNB into which I transfer funds on an ad-hoc basis. All is done via the FNB internet banking website. When you do the transfer, there is a short form that requires completing which FNB then submits to the SARB to obtain approval for the ZAR leaving SA. The entire transfer process takes about an hour from pushing the button until the USD's reflect in the Global Account.

Once a year in December, I then transfer the funds in the Global Account to the Channel Islands account. Again, this is done via the FNB internet banking website where you set up the Channel Islands account as an international beneficiary using the SWIFT details. Once the payment has been processed the funds reflect in the Channel Islands account within 24 hours.

I requested the Channel Island account to be linked to my SA FNB online banking platform so it appears as a separate account when I log on to FNB. You of course also get log in details to the Channel Island banking platform from where you can make transfers, payments etc.

I live in SA and only have an SA passport.

The only other bank that I know that allow SA citizens (that has no dual citizenships/other permanent residence status) to open a foreign bank account is Investec, though their one is UK Pounds only and you are allowed to have the UK account as long as you have a bank account with Investec in SA.

I have a call account with FNB Channel Islands denominated in USD. It is free of charge if you maintain the minimum blalance. You can opt for a full current account, which is a full transactional account with debit card etc but there is a monthly fee (that is waived if you maintain the minimum balance) and it is only available in UK Pounds. Since I have zero interest in ever living in, or be associated with the British, I opted for a the USD call account and together with the USD Global Account's debit card, it can be used for transactional banking should you wish.
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Thank you for the very detailed response!

By the way, Standard Bank does the same with its Isle of Man accounts option - also only in GBP and you need an SA account to transfer the funds.
 
Affieplaas said:
I currently get 2.4% PA on the Channel Islands call account, monthly credited against the account plus an annual IT3 certificate indicating the foreign interest received.

If I opt to transfer the current balance to a USD denominated 32-month fixed deposit account, the interest rate will be 3.75% PA.

Very few international banks will allow you to open a bank account while either not residing in the country or having a passport. If you are planning on emigrating to the UK or US and already have an address there (plus the right to live there), a few of the digital only banks will allow you to open an account while still in SA, the most popular UK ones are Starling Bank and Monzo while in the USA its Revolut.
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How is that possible, it seems to go against the principle mentioned by @rvZA that we cannot have interest-bearing accounts abroad.
 
itareanlnotani said:
Simple. he's wrong.
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Whatever dude.

I have 3 US bank accounts, with different banks and I cannot earn interest on any of them - even if two of them are business bank accounts. It is easy, because it is in contravention of US laws. Same applies in most countries abroad.

Over and above this, I have several accounts with Transerwise / Wise. None of them ever were interest bearing accounts, because they may not offer interest to foreigners. Only of late they found a loophole to 'share some of the profits they make from interest' with accountholders.
 
rvZA said:
Whatever dude.

I have 3 US bank accounts, with different banks and I cannot earn interest on any of them - even if two of them are business bank accounts. It is easy, because it is in contravention of US laws. Same applies in most countries abroad.

Over and above this, I have several accounts with Transerwise / Wise. None of them ever were interest bearing accounts, because they may not offer interest to foreigners. Only of late they found a loophole to 'share some of the profits they make from interest' with accountholders.
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I have interest bearing accounts in several countries.

For the US specifically you need an SSN or ITIN to have an interest bearing account. That's a US specific thing, not a worldwide thing, or a South African SARS thing. I get to pay US income tax, and have to fill in a W8BEN each year on interest earned each year, even if its not that much, and I'm not a US citizen.

www.irs.gov

Individual taxpayer identification number (ITIN) | Internal Revenue Service

An ITIN is a 9-digit number the IRS issues if you need a U.S. taxpayer identification number for federal tax purposes, but you aren’t eligible for a Social Security number (SSN). Find if you need one and how to apply.
www.irs.gov www.irs.gov
 
itareanlnotani said:
I have interest bearing accounts in several countries.

For the US specifically you need an SSN or ITIN to have an interest bearing account. That's a US specific thing, not a worldwide thing, or a South African SARS thing.

www.irs.gov

Individual taxpayer identification number (ITIN) | Internal Revenue Service

An ITIN is a 9-digit number the IRS issues if you need a U.S. taxpayer identification number for federal tax purposes, but you aren’t eligible for a Social Security number (SSN). Find if you need one and how to apply.
www.irs.gov www.irs.gov
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I do have an ITIN due to my business and investments in the US. Even with it not Citibank, Wells Fargo or Blue Ridge Bank could have offered me an interest bearing account due to their current laws - not a personal account or 2 business accounts.

Just removed my personal information....
 

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There is no rule that states that an SA citizen is not allowed to earn foreign interest.
Most bank in the US banks don't pay interest on savings accounts. Below is at 15 March 2023.
The average Annual Percentage Yield across all US banks currently is only 0.23% interest PA.
The FNB CI call account at 2.4% interest is therefore in-line considering how low the interest rates in the US are.
I am of the opinion that any well diversified portfolio must include some cash (not bonds, or money market ETF's etc) available immediately both as an emergency fund as well as a ZAR hedge.

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Affieplaas said:
There is no rule that states that an SA citizen is not allowed to earn foreign interest.
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Strange. That is not what the 3 banks told me when I was there in person to open my accounts the past 12 years. And, these were 3 banks in 3 different States.

In fact, I still have all 3 my accounts and to this day I still do not earn interest on any of them.

Maybe you could help me to get that corrected? Seems you deal with US banking to make this claim?

I understand that if you work through local banks, they will offer you interest, but opening and owning an account directly with the bank offshore prevented me from earning interest due to their laws. Only thing is, I do not want to work through local banks using their accounts. I wanted my own offshore account which has nothing to do with SA or local banks.

Oh, and one last mention, even if you are in the US and visit a bank in person and open an account as a foreigner, you cannot open a savings account at all. The only accounts they will help you with are non-interest bearing Check or Business Accounts. Even if you have an ITIN, you still are not allowed to open a savings account. Also the reason I currently have 3 check accounts.
 
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Affieplaas said:
There is no rule that states that an SA citizen is not allowed to earn foreign interest.
Most bank in the US banks don't pay interest on savings accounts. Below is at 15 March 2023.
The average Annual Percentage Yield across all US banks currently is only 0.23% interest PA.
The FNB CI call account at 2.4% interest is therefore in-line considering how low the interest rates in the US are.
I am of the opinion that any well diversified portfolio must include some cash (not bonds, or money market ETF's etc) available immediately both as an emergency fund as well as a ZAR hedge.

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Interactive Brokers is also giving 4.08% on USD (a bit less on GBP and EUR). Great one stop shop for SA investors wanting offshore exposure, and easy to open an account. If you can get options permissions you can also do box trades and make around 5%.
 
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