Guide to Opening an Offshore Savings Account for the First Time

by Amy Nutt

When we hear the words “offshore savings account,” the first thing we think of is movies where the blackmailer tells the blackmailed that they have to wire transfer so much money into an offshore account. Then again, a bank robber may hack into the bank’s mainframe and wire transfer the money into an untraceable offshore investment account so that he can live high and mighty on a yacht for the rest of his life. No matter what scenario comes to mind, we automatically perceive an offshore account to be something for criminals, making it an evil type of banking.

The truth is that having an offshore savings account is not at all evil. Just because you are thinking about getting one doesn’t mean that others will perceive you to be a criminal. A little mysterious? Yes. But not a character out of a James Bond movie.

The offshore bank

Offshore banks are banks that are located in a country other than your own. The reason why people choose offshore banks is because of the stability and the privacy that they offer. A person can spend this money when they want to, but many individuals choose not to do so. An offshore savings account is the choice of many individuals who wish to increase their savings. It just seems so much easier to spend money when it is in a local bank, but it seems harder to spend when it is in an offshore account.

There is also the fact that an individual can receive better interest returns and a lower tax burden. You are also able to have access to your assets no matter where you are in the world. You don’t have to be at the mercy of a local bank.

How to open the account

Anyone can legally open an offshore savings account in many countries around the world. Just know that there are a number of countries that may limit the amount of privacy allowed with these accounts. Amongst those countries are Switzerland, the UK, France, Germany, Cayman Islands, Austria, Belgium, Greece, Monaco, and many more. Basically, the countries involved in what is called the EU Savings Tax Directive 2005 can share information about anyone earning income from their offshore savings account in an EU state, but they must also reside in an EU state. The United States is not included in this, although the U.S. has been known to track down offshore accounts used in tax evasion.

As for opening the account, it is quite easy. The internet serves as a great tool in finding a viable offshore bank. You can choose a bank in the country you desire by seeking out the different banks and doing comparisons regarding any fees and the types of interest returns they provide. Once you decide and you have read their terms and conditions very carefully, you can then complete the application form. Once the form is complete, you have to provide proof of your identity. This is usually done via e-mail or fax. The bank is then able to open the account and it is active once it is funded. This can usually be done by wire transferring money into the account or writing a check to the bank from another account.

Easy and convenient

Once the account is funded, you can then take charge of your offshore bank account via telephone, fax, or even the internet. Having a bank that allows you internet access to your account is probably one you definitely want to have since it allows you to take charge of your account very easily. Just don’t forget to pay your taxes.

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