Offshore banking may be something you haven’t considered until recently. After considering the benefits that come from creating and funding offshore checking accounts and other types of deposit accounts, you wonder if one would be right for you. So let’s discuss 9 reasons why you need to open an offshore bank account today.
Even those who consider themselves middle-class will find that establishing and growing offshore accounts makes sense for a number of reasons. Here are some that you should think about seriously.
1. Protecting Yourself from Domestic Economic Downturns
Were you among those who lost wealth during the last recession? Many people found that institutions they considered safe ended up costing them quite a bit. Some are still attempting to get back to the same level of wealth they enjoyed before the recession.
Insulate yourself from that sort of event by establishing international accounts while maintaining your domestic accounts. Doing so will mean at least part of your wealth is less likely to be affected by domestic shifts in the economy. Even if things should become dire again, the funds in your offshore accounts could be enough to keep you from a great deal of worry.
2. Enjoying More Competitive Interest Rates
Did you know that many offshore banking institutions offer interest rates that are competitive with anything that you can get closer to home? A quick comparison between the two will confirm that even modest investments in offshore checking accounts, term deposit accounts, or lifestyle accounts could produce greater returns. Think of it as one more way to build wealth and protect yourself from unforeseen circumstances.
Remember that larger account balances sometimes translate into enjoying higher interest rates. Even after your initial deposits, continue to grow your balances over time. Doing so will make it easier to enjoy the best possible rates and boost your returns.
3. Protecting Assets from Judgments
What would happen if you were sued and the court decided in the plaintiff’s favor? In most cases, your domestic assets could be seized in order to settle the judgment. How would you get by if all those assets were suddenly gone?
Not everyone knows that assets held in international accounts are rarely subject to seizure in order to fulfill a judgment. That means if it takes every penny in your domestic accounts to comply with the court, there are still funds to draw on safely tucked away in your offshore accounts.
4. Taking Advantage of Currency Diversification
You know that the rate of exchange for different currencies shifts constantly. Not many domestic banks provide options for holding different currencies in customer accounts. That could mean you miss out on opportunities to grow your wealth. In some cases, it could mean that your wealth decreases.
The good news is that offshore banks often have more options for holding various currencies. That positions you to take advantage of favorable changes in the exchange rates and boost your wealth.
5. Create Assets for Your Retirement Years
The day will come when you no longer want to work. Will you have enough to ensure those retirement years are free of financial worry? By choosing to set up and fund offshore accounts, you create assets that provide a greater financial cushion.
Remember there are lifestyle accounts that help you grow wealth that comes in handy if you chose to live abroad. It also provides the cushion needed to take care of unforeseen financial emergencies, such as an unexpected illness.
Do keep your domestic pension plan, savings, and other accounts going, but see your offshore accounts as one more way to ensure your retirement years are financially secure. No matter what happens, the funds are there to take care of whatever should happen.
6. Ready Funds for Medical Use When Abroad
If you don’t travel abroad often, you may not know that difficulties can arise if you need money for medical expenses. That’s due to some of the laws that apply to domestic banking institutions.
If you have funds in one or more offshore accounts, you can draw on them to cover those expenses. There’s often little to no delay, and you might even enjoy a more favorable rate of exchange.
7. Protecting Yourself from Potentially Unsound Banking Practices
Banking laws are subject to change. Couple that with the way that some institutions have operated just within the limits of those laws, and it’s possible for you to lose money because of those practices.
You’ll find that offshore accounts with a reputable institution and subject to transparent laws and regulations minimize the risk of your balances disappearing.
8. Minimizing the Risks Associated with Political Shifts
Political changes, especially ones that the marketplace considers unfavorable, will have an impact on your financial well-being. There are offshore institutions that remain relatively insulated from those types of issues.
A bank that’s based in a country with a stable political environment is a safe place to deposit your money.
9. A Combination of Offshore and Domestic Accounts Means More Peace of Mind
You already know that a diverse investment portfolio provides greater peace of mind. That’s because some of your holdings are likely to be increasing in value when others are either stagnant or losing a small amount of value. Why would your bank accounts be any different?
When you choose to establish offshore checking or term deposit accounts, think of it as a way to diversify and protect yourself from whatever might happen. In the best-case scenario, your domestic accounts do remain secure. If something does happen, those offshore accounts may be the resources that keep you from financial ruin.
Don’t Delay in Reaping the Benefits of Offshore Banking
These are only some of the reasons to seriously think about setting up and continuing to fund offshore banking accounts. Think about your plans for the future and how the benefits offered by offshore banking could help you reach those goals.
Seek advice from a financial professional and determine what sort of accounts would work best for you. Remember that changes in domestic laws may limit your options in the near future. Act now and you won’t be left wondering what might have been.
Luigi Wewege is the Senior Vice President of Belize based Caye International Bank, a FinTech School Instructor and the published author of The Digital Banking Revolution. You can follow his posts on trends shaping the banking and financial services industry on Twitter: @luigiwewege