World () - The continuing problems in the eurozone are causing real concerns about the future of the euro itself, even if it means it will change from its current form rather than disappearing altogether.
Expats holding currency accounts have been able to use the ability to change currency not only to help improve the interest rates they receive, but also to help them mitigate currency risk as one currency devalues against another. But with the eurozone crisis continuing to keep the future of the euro in doubt, and the United States, among others, trying to devalue its currency to help boost its economy, it is increasingly hard to decide which currency to hold.
Trying to get good interest rates on the currency accounts at present is an almost impossible task. For example, the top-paying US dollar account is the AIB International Savings Privilege Demand account, which is paying a poor 2.3 per cent on deposits of $5,000, according to data from Moneyfacts. The euro accounts are not much better, with this same account in a euro version paying just 2.7 per cent on a deposit of €5,000. This same account will also pay 2.7 per cent on sterling deposits of £5,000.
The next best rate of 2.35 per cent on a euro account is being paid on the Nationwide International Euro Bonus Access Account, but you must deposit €25,000 to get this, and it includes a 0.85 of a percentage point bonus for 12 months. When this goes, the rate would be just 1.5 per cent.
That seems low, until you see that the position on this account for the dollar is even worse – including a bonus of 1.475 of a percentage point, you are being paid 1.6 per cent on deposits of $25,000. The rates are slightly better on this account for sterling, which will pay 2.4 per cent on deposits of £25,000 – but again this includes a bonus of 1.9 percentage points. It will pay 0.5 of a percentage point to sterling holders once the bonus has gone.
