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22-05-2012, 14:15   #1
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Savings Advice for Non Euro accounts in Ireland

Looking for some savings advice. I'm looking to try diversify risk and set up savings accounts in other non Euro currency. I know I can set up a STG account in my local bank but what about other currencies. For for example I wanted to also set up a USD account too?

How cost effective is it to do so (baring in mind I would be transferring from Euro to other currency accounts)

Or would I be better off investing savings in a low risk area?
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22-05-2012, 15:29   #2
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You should be able to set up a USD a/c as easy as a GBP a/c, or other foreign currency accounts for that matter. These accounts are not always as easy to operate as regular euro accounts however, in terms of types of accounts available, making transfers out, etc - but your bank will give you these details.

I'm not sure what you mean by cost effective - you will be charged fees to transfer money out, so it depends on the amount, etc. But if you are considering this from a risk perspective, transaction fees shouldn't be your main concern. More relevant is the currency risk that you are taking on. Presuming you are and will remain based in Euroland, and therefore will require your funds in Euro at some point, you will be very exposed to the EUR/USD (as an example) rate - this has traded in the 0.90-1.60 range over the past 10 years. Obviously this would pay off if the Euro depreciated drastically, in the event of the current crisis deepening (as an example) - but what if things improved and the Euro appreciated from here? And if you are trying to guard against a doomsday scenario, how secure would your deposits be in an Irish bank dependent on ECB support, even if in USD? Lots of things to think about, and no easy solution, just be careful about taking on risk if your aim is to reduce risk.
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22-05-2012, 18:28   #3
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This different currency thing is a complete red herring.
I know you're thinking...if the euro looses value you're non-euro currency will hold up....or if the banks go wallop..........

Trouble is that you're exposing your money to the vagaries of the currency market. probably things will swing both in and out of your favour so there's a risk you'll loose if you need your cash at the wrong time.
Just remember that when you withdraw cash it'll be in euro demonination not sterling/dollar.maybe you'll win, who knows!also sterling is quite dependent on the euro. they export mainly to the eurozone so in a way they're linked.

I'm fairly confident that the euro is safe. there's been a lunatic on here withdrawing hard cash out of his account! If he's robbed look at the mess he's in! i believe if the sh1t hits the fan i'd rather have my cash as german currency whatever that may be. so safest bet is having an account with a german bank in germany. i looked into doing this when we'd the last 'scare' before xmas with deutsche bank to be told i'd need 100k...which unfortunately i dont have so i left my savings here. however there are brokers who can assist you with lesser sums.
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23-05-2012, 23:52   #4
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Originally Posted by faceman View Post
Or would I be better off investing savings in a low risk area?
You do not invest in currencies, you speculate... keep this in mind, because it could cost you a lot!

For example, several months ago people were pumping money into the Swiss Franc as the safe place to go, only to see the Swiss National Bank turn around and peg the Franc to the Euro causing savers to loose up to 20% on the exchange rate.. -- Strong currencies cause economic issues for the countries involved and eventually they have to take action, usually in the form of a devaluation.
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24-05-2012, 10:06   #5
Liam D Ferguson
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Originally Posted by Jim2007 View Post
You do not invest in currencies, you speculate...
Every adult should be required to repeat this statement on a daily basis. I cannot stress enough how important it is for people to understand this.
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