How safe is your money in a bank?

Most people think that their money is safe in a bank - safe as houses, yeah? Well, all that came crashing down with the financial crash at the end of 2008 and the subprime housing market collapse. At the time, some governments, such as Ireland smartly guaranteed your deposit 100% (although, only for a period of 2 years) in order to keep money onshore and try to attract inflows of money. Although, it is much easier for the Irish Government to cover £560 Billion than the UK's £1.8 Trillion. The UK Government only guarantees the first £50,000. The U.S. Government has guaranteed the first $100,000 in the bank since the Great Depression. They have now increased that to $250,000. The Australian Government guarantees ZERO. That's right, if an Australian bank goes bust, you have to get at the end of the queue for the creditors begging like Oliver. That means you may have to wait 6 months or more before you can get your hands on your own money.

So, where can your money get more protection? In the UK, the Post Office and a National Savings account is guaranteed 100%. But, the most flexible way to treat your money if you live in Thailand is to hold your money offshore in a tax free haven like the Isle of Man or Guernsey (both under the British Crown), which guarantee at least 90% of your money should the company go bust. Even better, it grows tax free and you can hold it in anything from cash, government bonds, shares or mutual funds, which means rather than getting close to 0% at a bank, your money can grow at between 5% and 12%+ (depending on how your hold your cash). You can then cash these in chunks and send them to your bank in Thailand. So, your money is protected and it grows at a much faster rate. Speak to your local financial advisor for more information.

Richard D. Malpass

Credenda Associates

Contact Richard / Visit Credenda website