Savings Interest Rates

fidobsa Serial expat

508POSTS

14 years ago

I don't live in Bulgaria although I do own a Building plot in Nikiup. I've heard that some banks in Bulgaria offer good interest rates on savings accounts. Do you think my money would be safe in a Bulgarian bank and can anyone recommend a good account?

See also

Opening a bank account in Bulgaria - Guide
Managing retirement savings in Bulgaria - 13 Replies
Interesting Discussion about "Neighbours"... - 5 Replies
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Burglary rate in Bulgaria - 23 Replies

harryoooh New member

5POSTS

14 years ago

There isnt one bank in Bulgaria that is Bulgarian. They are all foreign banks. Money should be safe but spread it around a bit. Very good interest rates!!

annanirvanna Active member

61POSTS

13 years ago

Harryooh:聽 can you advise what types of rates are available.聽 I am also looking to put some money into a savings plan and use the interest for paying expenses and and when they crop up.聽 At present I have a saving plan in Egypt giving 12.5%pa.聽 So if I can get a good rate I would rather withdraw from Egypt and keep my finances 'closer to hand' and invest in my (hopefully) new country.聽 Anyone can help with % amounts?

础耻谤茅濒颈别 ViP

22735POSTS

13 years ago

Hello annanirvanna, this thread is dated 2011. Maybe you could start a new one on the Bulgaria forum for more visibility.

Thank you,
础耻谤茅濒颈别

annanirvanna Active member

61POSTS

13 years ago

Hi -- again Aurelie.聽 I should call you my guardian angel as you have kindly responded to all me new threads with help and advice

,

New thread has now been posted by me - fingers crossed lovely expats in BG will reply and give me some much needed advice

Warm regards

Annie

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beahor Active member

95POSTS

13 years ago

hi annanirvanna

Yes, there are good rates available depending on what currency you deposit it in. Less for Euros more for Leva.
But, and that is a big BUT, you have to be resident in Bulgaria otherwise you are taxed on it.

annanirvanna Active member

61POSTS

13 years ago

Hi Beahor

Thanks for getting back to me.聽 I have a number of monthly UKP pensions that I could pay direct into a BG bank account.聽 I also have a lump sum currently in Egyptian a/c that I could have transferred to a BG bank in UKP.

So what rates are available, do you know?
What banks do you or any other forum member recommend?
How easy is it to get Residency?聽 We are both UK citizens who are over 60 years and pensioners.
Do you know what % tax is incurred?

Any help on the questions above will be gratefully received.聽 We are so worried of messing up again.聽 Mistake No. 1 was emigrating from UK to Egypt.

beahor Active member

95POSTS

13 years ago

Hi,
As you know Bulgaria is in the EU so resident status is more or less automatic if you come from any member state.
And saving rates available are freely available on the internet and are generally double of what you get in the UK or Germany for that matter. You can invest in Dollar, Euros or Leva of course.
It is also my understanding that the first 100k of investment is covered in case banks are defaulting.
But as always, do you homework and maybe come to see the country for yourself. Investing at good rates in only worth it if you like living here too.

annanirvanna Active member

61POSTS

13 years ago

Thanks once again Beahor for taking time to post a reply back.聽 Will do some Googling later on to see what banks & savings plans are available.

Yes I agree a recce trip is important and I will hopefully be over in BG before year end.聽 So can do some serious data gathering and getting a feel for BG lifestyle.

At least the residency is one thing I don't seem to have to worry about - what a blessing that will be, not having to travel 250K every year to get an annual visa & hope the 'goalposts' have not been moved meaning I get refused.

Varnarama Active member

91POSTS

13 years ago

#10

TBI Bank are offering a very tempting 7% deposit account.
You have to deposit the money before the end of march though.

beahor Active member

95POSTS

13 years ago

#11

Rates of 5% upwards are not uncommon in Bulgaria and you can invest in Leva, Euro and even Dollar. And in common with all Euro states the first 100000 of desposit are safeguarded. So, I am not quite sure what you mean by is the money saf? But, and here is the important point, you need to physically live in Bulgaria to take adavantage of this, else you deposit is taxed at the going rate.

But do your research as all this info is freely available on the internet

Varnarama Active member

91POSTS

13 years ago

#12

One concern regarding the safeguarding of the first 100,000E, is the fact that the BDIF(Bulgarian Deposit Insurance Fund)is not backed by the government; it is in essence a private insurance fund taken out by the member banks.

beahor Active member

95POSTS

13 years ago

#13

I think this is pretty academic an argument. Even countries can default on their obligations. Especially if they are rated junk status like greece. So, you need to weigh-up the risks and my personal opionion is that I would聽 in Frankfurt.

Varnarama Active member

91POSTS

13 years ago

#14

Sorry beahor, I dont understand your last sentence.
Are you saying it is in your opinion, a risk worth taking?

Also, what I cant understand is - if the rates are this good (7% compared to the best rate of 2% in the UK), why arent foreign investors pouring their money into these accounts?
With internet banking - you'd have thought it would be reasonably straight forward.

beahor Active member

95POSTS

13 years ago

#15

As I said already.
You need to live in Bulgaria to get these rates net of taxable income.

Varnarama Active member

91POSTS

13 years ago

#16

The Bulgarian interest rates are now taxed 10% (as of january 31st) whether people are resident in Bulgaria or not.

Bank rate interest in the UK are taxed by 25% whether you deposit in a bank account in the UK or Bulgaria.

2%(UK) v 7%(BG) -25% = 1.5% v 5.65%

So if based in the UK, you should be able to get a rate of 5.65% after tax, which is 4.15% higher than any UK account.

beahor Active member

95POSTS

13 years ago

#17

No, you umderstood me wrong here or I did not make it sufficently clear.
A work mate of mine was hit with a 10% tax on the whole amount on his account as he was not properly registered as Bulgarian resident. The bank somehow missed this fact and he promptly got deducted some 5000 leva from his balance.
He is still trying to recover it.

worldlywanderer Contributor

111POSTS

12 years ago

#18

I've been looking at savings rates on the web and certain banks in Bulgaria offer quite complex rates - nearly impossible for the layman to comprehend. Any links to banks who are currently offering interesting rates would be greatly appreciated.

Annanirvana said she had posted a new forum entry on this subject - a link to it would be most helpful.

The idea that any country could impose a tax of 10% on capital is quite unreal. This means that one loses almost two years interest. With imposts of that nature I think you have your reason why people will not invest in Bulgarian banks.

I would point out, however, that EU law requires Bulgaria to treat all European citizens equally. It is, therefore illegal to tax savings for any European citizen living anywhere in Europe differently to a European citizen living in Bulgaria.

Varnarama Active member

91POSTS

12 years ago

#19

Wordlywanderer,

The 10% tax is 10% of the profit.

E.G if you invested 拢100,000 and there was an interest of 7%, you would receive 拢107,000 minus 拢700 tax.

I think it is 20% tax on bank interest in the UK!

Hope this helps.

worldlywanderer Contributor

111POSTS

12 years ago

#20

Thanks for the arithmetic lesson but my response was directed at another poster who seemed to think the charge was based on the deposit.

Varnarama Active member

91POSTS

12 years ago

#21

Just to keep everyone up to date:
As of october 2013 the best savings rate I can find is Fibank at 6.8% (for a 3 year deposit).

Scanspeak Guest

0POSTS

12 years ago

#22

Fibank is bulgarian owned, as is now MKB Union bank. All deposits are guaranteed for up to 聙100k in total by the financial compensation fund. It guarantees that in the case of a default, compensation payments will commence within 20 days, but guarantees nothing about when they would end ( so when you would get your money back at full ). Its insurance based. Generally, the higher the interest rate you get, the higher risk you bear. BGN deposits would yield you higher interest than euro or sterling but if you intend to draw benefits elsewhere, consider exchange rates.
Unicredit, Postbank and Raiffeisen are at around the 2.5% mark. Some may offer you up to 7% - your money, your choice.
By residency, what you should look at is tax residency, not where you live. If tax resident in the UK ( hard to get rid of it unless you`ve been abroad for too long and have sold your holdings in the UK ) - you will pay at a basic rate ( so 20% ) on your income from savings. Its very loosely defined by the HMRC in general.

Varnarama Active member

91POSTS

12 years ago

#23

Thanks for that, Scanspeak

So basically, we get charged the same rate as we would from a bank in the UK.

worldlywanderer Contributor

111POSTS

12 years ago

#24

What interests me is the disclosure rules. If one is overseas how does the UK tax man know what you have been paid by a Bulgarian Bank? Do the banks send lists of customers with their addresses and interest paid each year to HMRC?

Scanspeak Guest

0POSTS

12 years ago

#25

You have to file your tax assesment form and include the income from savings, trusts, rental generated while abroad. You get tax relief which is the lower of the foreign tax due or the amount of UK tax payable.
That is if you are considered a UK tax resident. There are many rules that apply and you may or may not be one. It is loosely defined by the tax authorities and many cases have even been brought into court.

mckayphil Active member

44POSTS

2 years ago

#26

I look at all this in a simple way.聽 i have no wish to expat and so i want to keep my tax and banks and savings in the uk ,聽 i can and am getting tax free money using an ISA and thats 拢40000 a year for a couple聽 if i want it...聽 interest rates are up and down for most countries at the same time. im getting 5.7% paid every month from fixed rate bonds聽拢85000 protected per bank.聽

i use wise card for my day to day living when im out in BG and a small amount of cash from an ATM of usually 400lv a month , this could be a problem for people who live in the countryside as cash will be king and cards rarely accepted.

Bulgarian banks have some very strict聽 and peculiar rules that can land you up shit creek very quickly.聽 as an example that happened to me this year with the coop bank.聽 I went into the bank with my Bulgarian friend to update with my new UK passport.聽 It was almost like i was applying for a new account.. Id got my old passport and my new passport and my debit card as proof i was really me聽 . they wanted a letter from National Insurance which id used in 2015 when i opened the account.聽 i showed them all my evidence and they insisted on seeing my national Insurance letter as it was the only evidence to prove who i was lol聽 .. the fact that there own government had let me into the country based entirely on my passport just seemed to go right over there heads lol..anyway聽 within 5 minutes they suspended my account cancelled my debit card and this was our 1st day of my months ski holiday.聽 i was shell shocked! so all the money in my bank was now untouchable,聽 luckily i had my wise card and 350lv cash which i always take home for my return trip for the next holiday.

Took me till September to get it open again. now i keep the NI聽 letter in BG and the shiny new NI plastic card in my wallet just in case..聽聽would that happen in UK ?聽 I doubt it!聽聽聽聽聽 So its good to have a BG bank account聽 for getting cash, its good to have a internet聽 global account like wise for using your debit card and to do very cheap transfers to your BG Bank account.聽 Best way is to have a years living money in your BG Bank and then only do transfers from UK when the rates are good not because you have to.聽聽 And also worth mentioning that if you are non expat you get the yearly increase in your old age state pension.聽聽 sorry no you cant use your bus pass in BG

As im getting up there in years i took a leaf out of the way Pension funds treat your hard earned cash that you give them to save and invest for your retirement. in the early years higher risk higher profits as you approach retirement they start to put your money into less risky investments and in the end your in low risk investment.聽 so when your getting on in years and youve given up work the money that you have to live on is quite precious so why would you then up the risk to get a percent or 2 more..聽 If you can have a good life, can save a little for a rainy day and have no stress! Thats got to be the best way to retire isnt it?

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