US Edition With savings rates in the UK hovering around the 0.5pc mark, you could reap higher returns on Australian savings by opening an Australian dollar currency account – Barclays, for instance, is paying 2.87pc on a 12-month cash bond for amounts up to A$40,000 (£22,374). The rate is 3.56pc if you can tie up more than this for a year.
Jeremy Cook, chief economist at foreign exchange broker World First, said: "If your account tracks interest rates, it looks likely that the Reserve Bank of Australia will continue to increase the base rate."
Another way to take advantage of Australian rates is to open a savings account over there, which will be covered by the Australian Government's unlimited guarantee.
You can do this through Australian savings institutions – Westpac, which has a London branch, for example, is paying 4.3pc on its e-saver account, including a 1.55pc introductory bonus for the first four months, while HSBC Australia is paying 4.75pc on its Serious Saver account, reverting to 3.25pc next March. You must provide identification documents to comply with Australia's anti-money laundering laws and you will have to pay a 10pc non-residents' tax in Australia. The UK has a double taxation treaty in place with Australia, so you won't pay tax twice – but you must declare interest on your tax return and pay top-up tax to your usual UK rate. HMRC is clamping down on undeclared offshore savings income at present.
Beware, too, the currency risk. Economists point out that there is capital risk to your savings as the pound continues to weaken.
Mr Cook said: "Converting sterling to Australian dollars is not necessarily a viable strategy."