Friends Mutual Savings Account - Catch?

[Zingari]

Looking round for decent interest rates for savings and Google threw this one up.

New Zealand based offshore fund (insurance against loss backed by Lloyds) that allows UK investment with 6.12% interest for £5k+ rolling 12 months.

Given that 2% is the norm there must be a catch?

http://www.friends-mutual.com/en/show-all-current-...

[Jockman]

Interesting one....I'm assuming you just declare the interest on your self assessment

[The Leaper]

It's not clear if this is a UK based or foreign account. If UK based, the interest will either be deducted at source at the 20% rate and you will have to complete SA correctly to record gross and net amounts, and account for the balance due, or paid gross and you'll account for the tax due via SA. If it's a foreign account I assume that there could be some form of with-holding tax to pay in NZ, and then the balance is paid to you. This will mean that as far as SA is concerned you will need to complete the Foreign Income forms and account for the gross amount and the with-holding tax, in addition to the SA forms specifically for the UK.

Another PHer may well come along and explain this account and the tax implications based on more direct experiences etc.

R.

[cashmax]

The company, nor the scheme are genuine. How on earth would you expect a risk free return that is more than double the best offered by the market?

Any money transferred to this company will be lost forever. Please use common sense when it comes to investing your hard earned....

[Jockman]

cashmax said:

The company, nor the scheme are genuine. How on earth would you expect a risk free return that is more than double the best offered by the market?

Any money transferred to this company will be lost forever. Please use common sense when it comes to investing your hard earned....

Quite probably

The blurb does say somewhere that they have several accounts available and that 1 is registered with the FSA

[maffski]

It looks like any NZ company can offer financial products with limited oversight and regulation as long as they are only offered overseas and not in NZ itself.

For example here is a story about a company calling itself a Bank without being a real NZ Bank - City Savings Bank. This resulted in the NZ banking regulator issuing a statement that the company was not a bank, was not regulated and should not be trusted as a bank.

And here is a story a few months later on a company renaming itself from City Savings Bank to Friends Mutual

There's a Money Saving Expert thread on it as well.

[dalenorth]

I'd avoid this, is it really worth risking your money for an extra 2 or 3% PA?? Some high paying dividend shares might give you a similar rate, but there is always risk involved!