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Old 6th October 2008, 20:24   #1 (permalink)
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high interst bank accounts

does anyone know if you have to pay tax on the interest earned on these high interest bank accounts and if so how much. thinking of putting some money into one but a bit concerned that these high intrest accounts are to good to be true.
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Old 6th October 2008, 20:38   #2 (permalink)
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Re: high interst bank accounts

I presume that you are talking about Turkish Goverment Bonds.Currently they are around 20% interest gross less about 12.5% tax and Bank Charges. The big plus, is that they are guaranteed infull by the Turk Goverment.Nice to know during the current climate.

Ian
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Old 6th October 2008, 21:41   #3 (permalink)
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Re: high interst bank accounts

If you are talking about an ordinary "deposit" account in a Turkish bank - yes you do have to pay Turkish tax. You register for tax and get a number, take this to the bank when you open your account and they do the rest. You decide how long to leave the deposit before earning interest, one month being the shortest. At the end of this period, the bank works out your interest, deducts the tax and puts the difference into your account. This then starts a new month and the same thing happens each month.

If you want to withdraw money, you must do this on "interest day". Any other time and you lose the interest you have earned, and the month begins again. Maisie
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Old 6th October 2008, 23:43   #4 (permalink)
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Re: high interst bank accounts

Hi Jan; Masie is right; if you put money into a time deposit account (saving/investment account) say on a 30 day (Monthly) revolving account (& dependiing on capital amount saved) you could receive up to 18.5% interest, lest Turkish tax paid leaving a net. figure of around 15.5%. This would be credited to your account on the monthly anniversary date to become the new capital (subject to no withdrwals or deposits not on the anniversary date) The tax is taken off automatically (but you need a tax number to open the account) & you may need to consider reciprocal tax implications with your UK tax liabilities) Any account activity on your part must be as Maise says on that one day-or you lose interst for the month. These types of accounts once set up, can be run via internet or telephone. It is easy to set these accounts up when in Turkey (not easy from UK see other threads) These accounts are 'not too good to be true' but you also need to consider the initial exchange rate before investing,

Cheers,
Gaz
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Old 7th October 2008, 13:21   #5 (permalink)
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Re: high interst bank accounts

There are some good, helpful posts here. Thanks people!
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Old 7th October 2008, 14:29   #6 (permalink)
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Re: high interst bank accounts

Quote:
Originally Posted by RIK
I presume that you are talking about Turkish Goverment Bonds.Currently they are around 20% interest gross less about 12.5% tax and Bank Charges. The big plus, is that they are guaranteed infull by the Turk Goverment.Nice to know during the current climate.

Ian

Hi Ian,

I was quoted 10% tax by Isbank.

I didn't know they were guranteed though.
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Old 8th October 2008, 13:21   #7 (permalink)
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Re: high interst bank accounts

Your bıggest ıssue on an ordınary tıme deposıt account ıs the varıatıon ın the ınterest rate over the tıme your funds are locked ın. For example ıf net of tax you earn 16% over 12 months and at the end of 12 months the Turkısh lıra ıs worth 25% less than when you put the funds on deposıt then you have a potentıal loss. The word ıs POTENTIAL dependıng on whether you need to take those funds back ınto sterlıng. If of course you don t exchange back but use the funds to pay expenses ın Turkey then you have made a 16% gaın less whatever ınflatıon does to that money. I belıeve the tax to be 15% on deposıts but 10% on govt bonds.
Wıth bonds your addıtıonal ıssue ıs the abılıty of the Turkısh govt to actually repay your capıtal wıth ınterest. There ıs no ındıcatıon that I am aware of at thıs tıme they could not do that. However I am nervous about anyone beıng able to borrow and afford to be able to repay at such an hıgh ınterest rate for very long.
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Old 9th October 2008, 07:59   #8 (permalink)
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Re: high interst bank accounts

"Interest day" is the only day you can draw out your money without loss...quoted above in a posting.
Well I have taken interest out earlier than the specified day and received it all up to that day without any problem. My 30 days still stayed at the same date and as long as you don't touch the capital, no problem whatsoever.
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Old 9th October 2008, 11:05   #9 (permalink)
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Re: high interst bank accounts

Isn't it a bit of a pain going into the branch ON A SPECIFIC DAY, just to take that month's interest out?
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Old 9th October 2008, 11:20   #10 (permalink)
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Re: high interst bank accounts

I have a bank account with Deniz and they are paying 19% interest at the moment on a 30 day account. I don't have to draw it out on a specific day, but I never take out the money before the end of the 30 day limit, the interest I have earned, if I don't spend it all, I put (via the internet) into a mutual fund which pays 15% before tax, and I still have my original capital invested.
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