If you’ve determined that an offshore bank account is suitable for your needs you now need to identify which account is the best account! There are a number of criteria you should bear in mind when comparing and contrasting offshore bank accounts.
However, as we will now explain, your considerations have to go beyond which account type is most flexible or beneficial. Because you’re going offshore, you have to carefully select not only your jurisdiction, but the best banking provider as well.
Allow us to guide you through the considerations you need to have in mind when researching which is the best offshore bank account.
Choose Your Jurisdiction Carefully
Whilst you may want to go offshore because the country you live is in less than politically or economically stable, or because you have little faith in the local currency or banking environment, there are quite possibly offshore financial centres out there that are even less stable!
When you review wiki’s list of offshore financial centreshttp://en.wikipedia.org/wiki/List_of_offshore_financial_centres you will certainly see some names on there that you’re less likely to trust when it comes to the banking and protection of your wealth. However, even some of the more legitimate looking nations may fail to meet your expectations.
Whilst we understand that there is a certain degree of regulation and consumer protection in place for bank account customers in the UK, offshore the rules and protection in place can differ greatly. You therefore have to do your country research carefully when selecting the best place to have your offshore bank account.
Finally for this particular point, some offshore jurisdictions are more focused on investment and reinvestment than banking – so once again, ensure the tax haven you choose has a solid banking environment in place.
Regulation and Consumer Protection Considerations
Following on from what’s written above, when it comes to the regulation of the financial services industry in a given offshore haven, you need to ensure it is tough enough to protect your interests.
Look also at the level of consumer protection in place locally – will it be able to pay out to cover your banked funds in the event that a bank goes bankrupt?
The investor protection in place on the Isle of Man was insufficient to protect all those affected by the collapse of Kaupthing Singer and Friedlander for example, and many who had their life savings in the institution have only seen £50,000 returned to them.
Double check how well protected you will be in a given offshore jurisdiction before you favour it for the home of your new offshore bank account.
Which Bank is Best?
Having selected a nation to trust you next have to choose a bank you can trust to manage your money. You may favour a named brand you’re familiar with, or you may be looking for a bank that instead offers you the specific account features and benefits you’re after.
If you do think you should trust a known brand, know that service levels differ between not only nations but branches too! So ensure that your account will be as well serviced as you expect it to be.
Also, watch out for headline rates of interest or short-term bonus features for opening an account with a given bank. Ultimately you’re buying a service when you open a bank account – and you need to make sure that you’re not being attracted by short-term benefits that may dwindle to be insignificant in time.
Ensure the bank you select will look after your needs well.
Parent Bank Considerations
It seems that almost all banks can be traced back to Santander as their parentage nowadays (slight exaggeration!), but what this does mean is that it’s important to know which banks yours is already associated with.
This is important because if you believe you’re successfully diversifying across institutions so that you could never risk losing all your money if one went into liquidation, think again!
If you discover that your chosen bank is associated with another with which you hold assets, you will only be protected once by any consumer protection policy in place.
Which Account Type Suits You?
You need to decide whether you want a personal or a business bank account, whether you need a multi-currency account, whether you can keep sufficient funds in the bank to benefit from their premier account type, or whether a plain vanilla current account will suit you.
To help you determine which offshore bank account suits you, see our related article entitled Different Types of Offshore Bank Accounts.
Read the Small Print and the Terms and Conditions
Finally you need to make sure you understand the terms and conditions of your bank account before you sign on the dotted line.
This may include you having to commit to payment of your salary into the account each month, or a requirement to maintain a minimum bank account balance, or a requirement to maintain a minimumrelationship balance with the bank. This may be in the form of savings, investments, mortgages and/or current account balances for example.
You may enjoy a headline rate of interest on deposits, but only for a short-term. You may benefit from certain features such as travel insurance or emergency evacuation cover for example – but there may be additional criteria applied to such benefits in order for you to be able to benefit from them.
Furthermore, you need to understand monthly fees, charges related to transferring money internationally or between currencies for example and any charges you may incur if you become overdrawn or use an international ATM.
Ensure you closely read all the terms, conditions and small print associated with your offshore bank account before agreeing to them.