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Monthly Income Accounts

Many banks provide offshore accounts based in the Channel Islands and the Isle of Man. Interest is paid into the account gross but has to be declared as income.

Monthly income accounts may be notice or no notice accounts. They pay interest monthly, rather than annually or on account maturity. These may suit you if you are looking for regular income from interest payments.It may be possible to operate these accounts via a branch, telephone, post or the internet.

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Obviously, if you choose an account which is operated by post, telephone or the internet, there will be a delay in receiving funds due to how these accounts have to be accessed.Some accounts may offer facilities such as a cash card or passbook.

Things to watch out for:

• Minimum balances - With some savings accounts there is a minimum amount you have to put in to open the account.
• Withdrawals - Although you may not have to give notice to withdraw your cash, some savings accounts include conditional bonuses in their rates of interest. These often relate to the number of withdrawals that are made over a certain time period. If these are exceeded, interest can be lost.
• Unconditional bonuses - Some savings accounts include a bonus rate of interest until a certain time. These savings accounts can offer an attractive return at outset, but can reduce considerably once the bonus rate ends. If you choose a savings account with a bonus rate it is worthwhile reviewing the rate once the bonus term ends.
• Rate guarantees - some savings accounts will offer a guarantee on the rate of interest you receive, despite being a variable rate account. These often relate to the Bank of England base rate. Some rate guarantees have the same effect as a bonus.
• Conditional bonuses - These can include obtaining a higher rate of interest if you hold your current account with that provider, or if you do not make many withdrawals over a certain time period.