What is the best savings plan?

Yeah, I know.  It's really annoying.  I assume the opening deposit is limited to the same as one month's deposit, so I can't just move the old account into a new Monthly Savers?

Unfortunately yes. I looked at one in the past but decided against it because it wasn't competitive when the sums were done!

I'm sure you're aware of fbar?

Hmmm. Well, my extra 500 pounds (hypothetically) is actually going to be in dollars. To a USA bank account. So I'll probably look into some of the online Savings Bonds or Treasury Bonds for a while. The purpose of the exercise is to try to keep the value of the dollars ahead of what inflation will do to them, really. 

That is what I thought, you will have your excess income in the US in your US bank.

Treasury Direct does not pay interest until you cash in a bond or part of a bond so the interest income does not arise until the bond is cashed and it is that tax year that it will have both US and UK tax due. In the February after you have cashed I-Bonds you will receive a 1099-INT, not by mail but online.

The only reason NS&I doesn’t allow USCs to buy their bonds is the cost to the UK taxpayer for them to become and remain FATCA compliant. It costs next to nothing to report “we don’t allow USCs to hold our bonds”.

So are the bonds' interest proceeds double-taxed, then?

So are the bonds' interest proceeds double-taxed, then?

No, that is what FTCs are for.

Ok, that works for me!

I'm sure you're aware of fbar?

Yeah. I had to file FBAR last year because I moved my US savings through to pay the deposit on our house in 2016.  It was only in my UK accounts for a few days, but you know it only takes a minute to trigger FBAR.

I triggered it again toward the end of last year as my ISA and my savings for ILR accumulated to total more than $10k.  And since I didn't pay for ILR until last week, I entered 2018 with FBAR already triggered for next year's filing, too.  It looks like I'll be filing it for the rest of my life, or until/unless the law changes.

Once a point is reached where one no longer needs immediate access to savings and can begin to save long term for the future, the standard procedure is to establish a 3 or 5 year 'ladder'. One higher interest 3 year fixed term account is opened yearly, and the process is repeated in the following years. Then, in each year, 1 of the 3 accounts will mature and the proceeds are re-invested in another 3 year account. Rinse, repeat.

Unfortunately, currently the rates for 3 or 5 year fixed accounts are only slightly better than those available for 1 year accounts. If rates do rise, then having the funds tied up in a 3 year account at lower rates becomes a losing proposition.

Since the US is attempting to replace Switzerland as the worlds largest tax haven, there may well be no restrictions on residence or nationality. But it would be worth attempting to register online to find out 2 things: first, do you require a US address, and second, do you require a US bank account.

As for the 2.58% return, some thoughts:

I'm not sure of the implications for HMRC reporting (when to declare profits or do they qualify for a UK tax free amount). If tax is due in the UK, and offsetting any US tax paid, for those in the 40% UK bracket especially the after tax profit won't match what one would receive in the US. Still, ~2.58% is better than 0.20%.

I have just started registering, and it does ask for a US address, US phone number, and US bank details (routing number and account number).  There doesn't seem to be any way to specify UK details.  At the bottom of the page, there's a Taxpayer Identification Number Certification, where you affirm that:

   1. The number shown on this form is my correct taxpayer identification number.
   2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of failure to report all interest and dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding.
   3. I am a U.S. person.

On the next page, where you review your details, there's another certification affirming that:

Certification

By clicking the SUBMIT button below:

   1. I understand that I am submitting an application for the establishment of an account in TreasuryDirect.
   2. I acknowledge and accept the terms and conditions as specified in the regulations for TreasuryDirect accounts.
   3. I agree to accept Form 1099-Substitute electronically instead of on paper for every year a statement is furnished.
   4. I certify that all other information on this form, including information about my account at a financial institution, is true, correct, and complete.

Unfortunately, currently the rates for 3 or 5 year fixed accounts are only slightly better than those available for 1 year accounts. If rates do rise, then having the funds tied up in a 3 year account at lower rates becomes a losing proposition.

That's why I am sticking to 1 year fixed at this time. Since I am draining my work retirement savings I am getting a little too much built up already and will either open another 1 year with another company or maybe one of the online savings accounts....1.3% with Virgin money.

That's why I am sticking to 1 year fixed at this time. Since I am draining my work retirement savings I am getting a little too much built up already and will either open another 1 year with another company or maybe one of the online savings accounts....1.3% with Virgin money.

Oooh... Virgin is offering 1.3%?  I already have my ISA with them.  Maybe I'll add a regular savings account there, too.  Over the long term, that's better than the effective rate in my Lloyd's Monthly Savers accounts (2% over the year, but effectively 1% on the ending balance).

Gawd, I've gone about money completely backwards in my life.  Back when interest rates were high, I had debt.  Now they're nonexistent and I have savings.  I'm so financially out of sync in this lifetime.  I want to join a different generation... an older one that had opportunities to grow their wealth.

Oooh... Virgin is offering 1.3%?  I already have my ISA with them.  Maybe I'll add a regular savings account there, too.  Over the long term, that's better than the effective rate in my Lloyd's Monthly Savers accounts (2% over the year, but effectively 1% on the ending balance).

Gawd, I've gone about money completely backwards in my life.  Back when interest rates were high, I had debt.  Now they're nonexistent and I have savings.  I'm so financially out of sync in this lifetime.  I want to join a different generation... an older one that had opportunities to grow their wealth.

If I had known 30 years ago about Vanguard funds I'd have a fair bit more money. Problem is....when I was under 30 I didn't know, but probably wouldn't have been patient enough to just dump money slowly but surely into something like Vanguard Wellington fund and just sit around for 30 years until it became big. The last 5+ years I worked I finally knew enough not to be dangerous and I started chucking everything extra into my work retirement and Vanguard. Investing when young is a really hard thing to do.....and that's even if somebody has sat you down and "shown you the light" on how to invest safely.......which doesn't happen very often. 

Investing when young is a really hard thing to do.....and that's even if somebody has sat you down and "shown you the light" on how to invest safely.......which doesn't happen very often.

We are in this place now.  Not "young" but young enough.  But of course our outgoings are huge at the moment with small kids and full time childcare.  It's tough!

Trying to get ahead of the curve...  not easy!

I have just started registering, and it does ask for a US address, US phone number, and US bank details (routing number and account number).  There doesn't seem to be any way to specify UK details.

I also had a look at the site and ran into the same problems.

It also asks for US driving license details. I haven't had a US license for donkey's years. I know this has to do with increased security after the hacking incidents, but does anyone know whether or not there is a way around it? Surely there are people in the US who don't have a driving license.

I have no intentions of investing any funds in the US, but was just curious.

We are in this place now.  Not "young" but young enough.  But of course our outgoings are huge at the moment with small kids and full time childcare.  It's tough!

Trying to get ahead of the curve...  not easy!

I had the advantage of not getting married until I was 49....so there were no kids for me to take care of. And....wouldn't you know that when I do get around to getting married she has 4 kids. Financially it didn't hit me much since the youngest was 16. If you still have a lot of years to put some money away, maybe something like the Vanguard LifeStrategy funds (through the UK Vanguard) or Target Retirement funds would work.

I had the advantage of not getting married until I was 49....so there were no kids for me to take care of. And....wouldn't you know that when I do get around to getting married she has 4 kids. Financially it didn't hit me much since the youngest was 16. If you still have a lot of years to put some money away, maybe something like the Vanguard LifeStrategy funds (through the UK Vanguard) or Target Retirement funds would work.

With a bit of luck we *only* have 20 years of work left.  Unfortunately it's likely to be a higher number, but I'd love to retire early!

Yup, going to look into Vanguard. 

We are currently trying to decide what we want our financial future to look like.  What does a healthy retirement look like, what are our short term and mid term financial goals, etc.  I think we are actually doing alright in terms of retirement savings.  Just need to be sure the money is going into the best investments possible.