While there is no question that global diversification is a great move for your portfolio, many individuals choose to establish savings accounts in their home countries and then venture offshore for a greater range of investments or even lending. However, establishing offshore savings accounts can be a savvy move. To find out whether you could benefit from establishing an offshore savings account, count down their five biggest advantages.
1. Better Interest Rates
For those who have a substantial amount of cash that they want to protect within a savings account, offshore options can often provide better interest rates. In some cases, you can enjoy higher interest rates as you save more money. At Caye International Bank, for example, lifestyle savings accounts can provide 0.10% APR on balances up to $25,000, 0.25% APR on balances up to $50,000 and an impressive 0.50% APR for account balances upwards of $100,000.
Not only does this strongly encourage you to continue saving, it can be a great way to watch your net worth grow without taking any investment risks whatsoever.
2. Lower Overhead Fees
Savings accounts can come with a range of different fees from monthly usage fees to management fees and even application fees. Although these may seem unavoidable, choosing banks with lower fees can help you to save your hard-earned money. Bank fees vary widely, but a surefire way to find lower fees is to look in offshore destinations where the cost of living and overhead is naturally lower.
Latin America, and Belize in particular, is a clear winner in this department.
3. Greater Diversification of Assets
If all of your savings and investments are currently in one currency or in one geographic location like the United States, you might want to keep in mind the adage of not keeping all your eggs in one basket. By establishing a savings account in an offshore destination, you can greatly reduce your risk.
In the event that one banking system should fail or government intervention in one nation becomes problematic, you’ll always have your offshore savings accounts to act as your financial safety net.
4. Ideal for Expatriates
If you are moving abroad for work or you are planning to retire for all or part of the year in an international destination, then you’ll want to consider establishing an offshore savings account in your new place of residence.
If you ever need to withdraw money from your savings account, it will be logistically simple thanks to your proximity, and you can forget about costly currency conversion expenses.
5. Potential For Lower Tax Burden
Perhaps one of the biggest benefits of establishing an offshore savings account is to reduce your tax burden. By keeping a large portion of taxable assets offshore in a tax-friendly jurisdiction, you could be able to significantly reduce what you pay annually. This completely legal banking maneuver could help you to maintain your wealth and even protect it for future generations.
For these five reasons and countless more, establishing an offshore savings account can be a smart move for investors from around the world.