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Choosing the right bank account can be a difficult process when placing your money either in an offshore or onshore bank account. Onshore and Offshore Banks are fairly similar broadly speaking but it is their confidentiality that sets them apart from each other. Is your money in the right bank account - to find out
We are frequently asked about where is the best rate of return. The term good return is very subjective. It depends on what you want to achieve from your money and your risk/reward profile. If you are interested solely in deposits then shopping around to secure the best interest rates can be a lengthy process. There are banks which offer almost double digit interest rates, depending on various factors in particular the base currency. One can achieve double digit deposit interest rates but it will be in a currency that is weak and volatile. When converting the deposit back to a currency that is strong and secure, your double digit returns could be massively diminished.
Confidentiality offers the international investor an environment where he/she can manage their affairs in the most efficient manner possible. It is likely that you require a local account in the country in which you live for day-to-day or business costs. However, the bulk of your capital may be better served offshore. Typical offshore centres are Jersey, Switzerland, Isle of Man, Bermuda, BVI, Guernsey, Dublin and Lichtenstein.
When selecting a suitable offshore account, the basic criteria are not that different from the ones when choosing your bank at home - service, convenience, and financial stability. Offshore banks offer the full range of services you expect from any bank. You should look for banks that make it easy and convenient to transfer funds - from any location in the world. The bank should be located in a country offering maximum confidentiality with tax advantages and one where the political situation is stable and friendly to foreign depositors. Your interests may be geographically specific, or they may be entirely geographically independent. Could the EU Savings Directive affect you, are you subject to local laws which could affect your access to capital in the event of you or your spouses demise. And as always, it is worth consulting a financial planner because careful selection and expert advice is indispensable.
A popular misconception is that offshore banks are associated with sophisticated financial transactions occurring in distant locations. The reality is far from it because offshore banking and investing can be an important financial tool for many individuals. An offshore bank is located in a country where banking, business and tax laws offer advantages that are possibly not available to customers at home. These advantages include confidentiality, favourable tax treatment, sheltering assets, estate planning and efficiency in international trade. All of these goals are legitimate and perfectly legal. While the benefits and reporting requirements vary somewhat depending on your country of residence, there are few restrictions on banking and investing abroad. An increasing number of individuals use offshore banking and investments as a part of their overall financial strategy.
An important point to take on board is that interest rates should be roughly the same around the world if quoted in the same currency. If there is a large discrepancy to the contrary then one should examine carefully why that is the case. If the headline rate sounds too good to be true then have a financial expert cast a wary eye over the offer to identify any conflicts to you securing the best rates and ensuring your money remains safe. In essence, your money would be better served offshore and keep your day to day monies in a local account. |
