Lloyds TSB International increases fixed term savings rates for expats

by Ray Clancy on January 10, 2012

Demand for one year FTDs has increased, says Lloyds TSB International

Despite forecasting that the Bank of England base interest rate will not rise until the middle of 2014, Lloyds TSB International has increased the rates on its two, three and five year fixed term deposits (FTDs) aimed at expats.

The bank’s own sales data shows that demand for one year FTDs has increased ten fold in the three months to the end of November, as savers aim to lock in to better interest rates in the medium term until there is any prospect of base rate rises.

The five year terms rises to 4.5% from 4%, the three year rate from 3.3% to 4% and the two year rate from 3.2% to 3.55%. All have a minimum deposit of £10,000 and a maximum of £5 million. Interest paid is Gross AER.

The market currently expects that the Bank of England won’t lift the base rate from its current record low until around the middle of 2014.

‘Demand for short and medium term deposits has increased markedly over the past three months. Much of this is due to our improved rates in September, but we’re also aware that many expat savers are trying to make the most of flat lining base interest rates and the expectation that these rates won’t increase for quite some time,’ said Nicholas Boys Smith of Lloyds TSB International.

‘In 2011 we saw a definite shift towards FTD accounts, particularly those with a one year term, but also those with longer durations. In this low interest rate environment, many people have realised they need to make some changes to ensure they’re getting a decent return on their savings,’ he explained.

‘We expect demand for FTD accounts to continue rising, and with inflation forecast to fall in 2012, it won’t be long before FTD savers are making money in real terms,’ he added.

It means that based on MoneyFacts Offshore Savings rate tables calculated on 05 January 2012, the Lloyds TSB International rates are best on the market for three and five year FTDs.

Apart from exceptional circumstances, withdrawal is not possible before the completion of the fixed term. A charge may be payable in such circumstances.

Lloyds TSB International’s fixed term deposit accounts are available for expats, and residents of Jersey, Guernsey, the Isle of Man and Ireland.

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