As savings firm denies services to dual UK and American citizens due to Fatca
Germany-based Augsburger Aktienbank (AAB) has reportedly told customers it will close custody accounts and accounts for clients that are considered ‘United States Persons’.
Additionally, the offering won’t be available to US citizens in the future.
The closures will be effective from 31 March 2021, reported local B2B news website
Fonds Professionell, and AAB cited the US’ Foreign Account Tax Compliance Act (Fatca) as the reason for the move.
This is because the legislation requires foreign financial institutions and their US clients to report their financial information to the Internal Revenue Service (IRS) for tax purposes, as the US has a citizenship-based taxation system.
The top fixed bond rate this week continued to be offered by Shawbrook Bank, which pays 1.35% gross on anniversary on its 7 Year Fixed Rate Bond Issue 6. This account requires a £1,000 minimum deposit to open and must be opened online. Once opened, it can be managed online and by phone. There is a version of this account that pays interest monthly at a slightly lower gross rate of 1.34%.
Four providers offered the top-paying five year fixed bond rate this week. Shawbrook Bank pays 1.25% gross on anniversary on its 5 Year Fixed Rate Bond Issue 33. A £1,000 minimum deposit is needed to open this account. It must be opened online, but can then be managed online and by phone. There is a version of this account that pays interest monthly at a slightly lower gross rate of 1.24%. UBL UK pays a gross rate of 1.28% on maturity on its 5 Year Fixed Term Deposit, but also offers versions of this account that pays 1.25% gross on anniversary and 1.24% gross monthly. All versions require a
HomeNewsSavings Is it worth switching your savings account to a higher rate in 2021? Published: 06/01/2021 Share
2020 ended with savings rates at historic lows but will 2021 bring better rates for savers and is it worth switching your savings account?
Data from the Bank of England shows there is £215 billion held in savings accounts paying zero rates of interest. During 2020 many people became accidental savers due to lockdowns and regional restrictions that limited their spending. As a result, there was £150 billion saved into cash savings accounts during last year. By October 2020 savings balances had reached £111 billion compared to £45 billion in October 2019.
While savings rates at the start of 2021 remain depressed compared to previous years, those earning no interest or low interest on their savings could instead be earning up to 1.00% on a one-year fixed rate bond or 0.75% with an easy access account.
At the start of September, buried in an otherwise nondescript update about changing terms and conditions, the digital bank Starling made an unusual announcement.
From 4 November, the bank would introduce an interest rate of -0.5 per cent on deposits over €50,000 held in its euro account.
Starling had become the first British bank to set negative interest rates and charge customers for the privilege of holding their money.
The news became This is Money s most-read banking story in the whole of September.
Starling became the first British bank to introduce negative interest rates earlier this year
At the time, the bank s chief strategy officer, Declan Ferguson, told us it was slightly niche and the move hit a relatively small subset of customers , with no discernible impact of their behaviour .
It meant from November 24, interest rates on NS&I s variable rate products and some fixed term products were slashed.
Announcing the decision in September, Ian Ackerley, NS&I Chief Executive, said: Reducing interest rates is always a difficult decision. In April we cancelled interest rate reductions announced in February and scheduled for 1 May. Given successive reductions in the Bank of England base rate in March, and subsequent reductions in interest rates by other providers, several of our products have become ‘best buy’ and we have experienced extremely high demand as a consequence.
NS&I explained what the rate cuts meant for certain Income Bonds savers (Image: GETTY)