Brits look towards the dollar

An increasing number of UK expatriates are giving up on the sterling and the euro and looking at the UD dollar to provide more certainty with their savings.

Lloyds TSB International revealed that it has witnessed a significant increase in savers looking for dollar-denominated accounts. It has also now almost doubled the rate which it pays out on one-year-fixed-rate dollar accounts from 1.5 per cent to 2.8 per cent, reports the Daily Telegraph.

Lloyds TSB International’s Nicholas Boys Smith explained that many wealthy investors who do their banking internationally were not as keen to put their money into anything risky last year, which led to a marked increase in US dollar fixed-term deposits that are appealing because the currency usually performs well amid uncertain economic periods.

Mr Smith went on to say that risk-aversion among American-based international savers could have prompted them to lessen their foreign exchange exposure, resulting in further US-based savings. On top of this, putting your money away for one or two years at a fixed rate is now very attractive with such low prospects of the central bank increasing its base rate, he pointed out.

Moneyfacts said that the recently launched Lloyds TSB International dollar fixed rate of 2.8 per cent is the best which a very limited market has to offer. The account has a minimum deposit of $10,000. Lloyds has also raised its one-year fixed sterling rate from 3.1 per cent to 3.4 per cent, which takes it to just below the market’s best available deals offered by Irish Nationwide, Clydesdale International and AIB International, all of which offer 3.5 per cent.