Holding Sterling in Ireland - Dead Money?

  • Thread starter andrewm4894
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andrewm4894

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Hi All,

I am going to be exchanging €11000 into £ to pay for college fees over the next two years (want to lock in the price now with current exchenge rates, its a distance learning part-time course with a UK college).

i'm really struggling for find somewhere in ireland (or online) where i can put my £ and earn some interest on it over the next two years.

My bank told me they would not open a sterling account for me (as i'm not profitable enough) and from reading message boards it seems like i'm probably not the only one to face this issue. Has anyone come across any solutions?

any advice is much appreciated, cheers
 
No need to lock in todays exchange rate. The outlook for sterling over the next 12 months is continued weakness against the euro. Locking in today, might mean you lose money rather than save.

Keep your money in euro and earn interest. Theres plenty of good deposit rates around now, for people with a lump sum.
 
thanks for reply's
reason i'm itchy now on the EURGBP rate is because of two factors that could affect it (adversely from my point of view)
1. low £ beginning to have significant positive effects on UK economy (competitiveness, exports) thereby working to halt (even reverse?) decline in £
2. ECB interest rate cuts in late 2008 / early 2009 taking some strength out of €
my feeling is that both these factors together could lead to a fall in the EURGBP from it's recent high's
Mercantilist - if you can spare a minute, i'd be interested to hear some reasons why you feel "The outlook for sterling over the next 12 months is continued weakness against the euro". do you think it can get much weaker then it already is?
 
andrewm4894 said:
Hi All,

I am going to be exchanging €11000 into £ to pay for college fees over the next two years (want to lock in the price now with current exchenge rates, its a distance learning part-time course with a UK college).
Click to expand...

You can lock in a forward price now with a forwards contract which will also eliminate the uncertainty you want to avoid and you will have your euro funds on deposit in the interim. The forward price is likely to be more favourable than the spot price at the moment because sterling interest rates are higher than euro rates.
 
Angloirish Bank will open a stg account for you paying about 5.8%.
 
Thanks demoivre - thought had crossed my mind that forward contract could, in theory be suitable, but any ideas on how i can purchase one (and, most importantly - the transactions costs associated?)

Slim cheers i'll look into it , will give them a call.
 

To bring this thread back to life....andrewm4894, which option did you go with in the end?

I'm in a similar position whereby I want to take advantage of today's sterling price (got a good quote today from currency.ie) but want to hold onto the Sterling until I need to pay for something in the UK in June this year. Seems like no Irish financial institution will entertain the idea (e.g. AIB: not profitable enough for them, won't allow once off payments, needs to be regular payment. AngloIrish: I will need to transfer the funds to a UK 3rd party but Anglo will only transfer funds to an account in my name). Currency.ie won't do forward contracts for any amount under 30K approx.

Any help appreciated.
 
Could you just go to Newry and open a deposit account with a bank there, declaring any interest income for tax purposes?
 
Sorted via National Irish Bank ...opened an a/c with them today. No restrictions on regularity of transactions (unlike AIB) and no restriction on who I can transfer money to (unlike Anglo).

For anyone in a similar position as myself I would recommend NIB (so far), very friendly, actually WANTED my business and very flexible...just how a bank should be....oh when will our large Irish banks learn??

Only negative thing about NIB's sterling a/c is that it doesn't pay any interest however Anglo do through their fixed sterling accounts (e.g. 1month, 3month, 6month or 1year fixed). So ends up I'll be opening 2 sterling A/Cs afterall (one in Anglo to hold the sterling for 3 months and earn some small interest on it and one with NIB so I can transfer the funds from Anglo once it matures to NIB then to the 3rd party in the UK in June). Messy and takes longer (i.e. have to wait a few days for each transaction to clear) but this was the only way around it (that i could see) and it works in the end.
 
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One of the largest and highly respected Sovereign Wealth Funds in the world warned against sterling yesterday:

Singapore's GIC sees more distress in markets
Reuters - ‎Mar 9, 2009‎
... of Singapore Investment Corp (GIC) said he expects more weakness in financial markets in the next 12-18 months, and recommended investors hold gold, sovereign bonds and currencies such as the Japanese yen, Chinese yuan and Canadian dollar.
He said he liked gold because governments were under pressure to cheapen their currencies to compensate for falling demand, and that some countries such as the United States and Britain would eventually be forced to monetise their debt by printing money.

"I would avoid these currencies like the plague," he said in reference to the dollar and sterling.
 
george.shaw said:
One of the largest and highly respected Sovereign Wealth Funds in the world warned against sterling yesterday:

"I would avoid these currencies like the plague," he said in reference to the dollar and sterling.
Click to expand...

Thanks George.Shaw...the weakening Sterling is the exact reason I want to buy it now (although it's getting even cheaper as I type so I might wait a little longer before buying)...it'll mean I have that much more of it when I go to buy what I need in the UK in the summer. Happy days!
 
if you are looking do a forward contract EUR / GBP see below the EUR/GBP forecast for the next 12 months


+1 month 0.9199
+3 months 0.9380
+6 months 0.9625
+9 months 0.9597
+12 months 0.9515

this figures are from RBS trading team
 
Slim said:
Angloirish Bank will open a stg account for you paying about 5.8%.
Click to expand...
not any more

"Notice to Customers
Please note that effective November 1st 2009, Personal Savings will no longer offer the facility to open any new non Euro denominated currency accounts. This does not affect how your account is serviced."
[broken link removed]
 
Interesting that Anglo have stopped opening GBP and USD accounts in Ireland.

Anglo Isle of Man are still accepting ROI applications for GBP and USD accounts.

[broken link removed]
 
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