Should I Use Multiple International Banks?

International BankingFor many offshore investors, one international bank is enough. This is especially true when the investor chooses to concentrate most of his or her efforts in a single nation. However, this approach is not the best strategy for other investors. Depending on the scope of investments that you choose to include in your portfolio, considering the use of several international banks, one being Caye Bank, could make a lot of sense.

Is One Offshore Banking Account Enough?

To determine if you can manage just fine with accounts with a single offshore bank, take a good look at the current range of assets that you own. Are most of those assets based in the same nation as the bank? Are you happy with the rates of interest that you have on any real estate loans? Do you find that the interest that the bank applies to your account balances is reasonable? When you can answer yes to all these questions, chances are that there is no need to make any changes at this time. Stick with your current bank and continue to funnel all your international investing activity through those accounts.

On the other hand, do you tend to diversify your portfolio by securing assets based in multiple countries? When this is the case, you may find that setting up accounts with several international banks is really in your best interests. This is especially true if there is a great deal of variance in the rate of exchange between all the currencies involved. For example, you may actually be losing money on certain assets if the currency conversion between the country of origin and the nation where you do your banking is not favorable.

The goal is to maximize the return you realize on your assets. This includes the dividends and other earnings that you receive from those investments. If using more than one bank will allow you to keep more of that generated wealth, then don’t hesitate to work with institutions in multiple countries.

What About Fees and Charges?

There is also the matter of fees and charges to consider. Along with any basic maintenance fees that are applied to the accounts, consider charges for funds transfers between international banks. Depending on the frequency of those transfers and the rates that apply, the expense could wipe out any benefits you gain by having accounts based in different nations. On the other hand, if those fees are relatively low and the transfers can be completed in a reasonable period of time, multiple banks are the way to go.

International Banks and Banking Laws

If you determine that using several international banks is the right strategy, make sure that you understand the difference in the banking laws that apply to each institution. Don’t make assumptions that the regulations governing the operation of each bank will be similar. Depending on where the banks are location, the differences can be significant. Look closely at those regulations and how they impact your ability to access your accounts and transfer funds. Unless you feel that the combination of international banks will ultimately provide an arrangement that benefits you, then step back and rethink the strategy.

Taking a Second Look at International Banks

Once you do make a decision regarding the use of multiple international banks, don’t consider the matter settled for the rest of your investment career. Circumstances do change, and you have to be prepared to adjust your approach when and as necessary. If you see no valid reason to set up accounts with multiple offshore banks right now, that’s fine. Just make it a point to revisit the issue a few years down the road. Depending on what is happening with the world economy and how those shifts are affecting your investments, it is possible that working with multiple banks will make sense at that time.

About this author

Caye International Bank Limited (CIBL) was granted an Unrestricted "A" Class International Banking License on September 29th, 2003 by the Central Bank of Belize and is regulated by the Central Bank of Belize which set the standards for liquidity and capital adequacy.